Australian Vintage (AVG) has suspended trading in its shares after Accolade Wines walked away from a potential merger.
AVG expects the suspension to last until June 11 as it works to finalise a “proposed capital raising, debt refinancing, and trading update”. The Australian Financial Review cited sources that the company was seeking a $30 million raise in a deal expected to be done at a high double-digit discount.
In an announcement sent to investors on Monday, AVG said Accolade Wines had exited the potential merger of the two companies, as the latter was “not in a position to continue discussions further”.
Bain Capital-backed Accolade, which owns Hardy’s, St Hallett and Petaluma, entered into preliminary talks with AVG regarding the deal in late February. However, Accolade was also reportedly seeking a deal with Paris-based Pernod Ricard – parent of Jacob’s Creek and St Hugo – earlier this month.
With Accolade walking away, AVG is sitting on net debt of $70 million to $75 million, compared to management’s guidance of $43 million to $50 million. Its $15 million bank capacity is also due to expire in July, reducing its bank capacity to about $78 million.
The company previously fired its CEO Craig Garvin over “lack of judgement” and “conduct inconsistent with the company’s values”.
