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.
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