Delegat's Group Bids for Oyster Bay Vineyards Stake It Doesn't Already Own

Delegat’s Group Ltd., New Zealand’s biggest publicly traded wine maker, plans to make a takeover offer for 45 percent of Oyster Bay Marlborough Vineyards Ltd. that it doesn’t already own.

Delegat’s will offer NZ$1.80 a share, or alternatively one of its shares for one Oyster Bay share, the Auckland-based company said in a statement. The bid would cost NZ$7.3 million ($6 million) if settled in all cash.

Oyster Bay shares last traded at NZ$1.60 on Oct. 12. The company, which grows grapes and supplies them to Delegat’s, in June said it was seeking advice on the most efficient capital structure. The company is in breach of its banking covenants because of a slump in grape prices and is operating under a waiver from its lenders.

Delegat’s considers grape prices are unlikely to improve significantly and in the short term any improvement in Oyster Bay’s financial situation is unlikely, it said. It holds 54.9 percent of Oyster Bay.

Delegat’s stock rose 5 cents, or 3.1 percent, to NZ$1.69 at 2:06 p.m. in Wellington trading.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.

To contact the editor responsible for this story: Iain Wilson iwilson2@bloomberg.net