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Delegat's ups offer for Oyster Bay by 23 cents a share

Friday 12th November 2010

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Winemaker Delegat's has lifted its takeover tilt for the 45% of Oyster Bay Marlborough Vineyards it doesn't already own.

Delegat's raised its offer by 23 cents to $2.08 in cash, or one Delegat's share for each share of Oyster Bay, valuing the target company at $18.7 million. That's 12% more than today's share price of $1.85, the same premium it made in the original offer of $1.80 a share when Oyster Bay was at $1.60. The Oyster Bay brand is Delegat's flagship export wine.

Oyster Bay's shares were unchanged at $1.85, as was Delegat's at $1.80.

The grape grower commissioned a report from First NZ Capital on strategic options this year after low prices for grapes put the company on track for a potential breach of its banking covenants. The breaches were later waived, and Oyster Bay subsequently reported a net loss of $13.8 million, including an $841,000 operational loss and asset write-downs.

Grant Samuel is to provide an independent adviser's report on the offer.

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