BUSINESS NEWS

Evans & Tate turns down Yarraman, evans & Tate has rejected an offer by the Yarraman Winery following…S&N FORMS JV WITH Wells & Young’s, Scottish & Newcastle uk is forming a joint venture with…TGI Friday’s sold in £70m private equity deal, Whitbread has sold its chain of TGI Friday’s restaurants to ABN AMRO Capital and Carlson Restaurants Worldwide for £70.4 million….

Evans & Tate turns down Yarraman

evans & Tate has rejected an offer by the Yarraman Winery following protracted negotiations. The US-listed Australian wine group made a takeover bid of AU$131 million (US$103m) for Evans & Tate after acquiring a 19.9% stake in the company.

The offer included repaying the company’s  debts of around AU$90m (US$70m) and was reportedly backed by US financial giant GE Capital, which offered to put up AU$72m (US$56.2m) of the financing.

Yarraman is looking to acquire distressed wine businesses in the New World, particularly Australia, New Zealand and Argentina, and turn them around. It aims to become a US$500m turnover business. However, questions have been raised about the health of Yarraman’s finances following its latest filing with the Securities & Exchange Commission.

Yarraman owner Gary Blom previously ran Barrington Estates, which collapsed with debts of AU$140m. This resulted in a three-year ban preventing Blom from running any company in Australia.

Despite reports of losses, write-downs and winery sales, Evans & Tate MD, Martin Johnson (above), said the company is aiming for double digit growth in the 2007 financial year largely based on its new Single Vineyard and Reserve wine ranges. “The success of this business has been based on a premium wine segment strategy and we’ve been working hard to return to that focus,” he said.

S&N FORMS JV WITH Wells & Young’s

scottish & newcastle uk is forming a joint venture with Wells & Young’s Brewing Company (W&YBC). The new venture follows S&N’s decision to purchase the rights for the production, marketing and sales of the Courage portfolio of ale brands.

W&YBC will take an 83% equity stake in the new business, Courage Brands Ltd, and will be granted an initial seven year licence for Courage, Best, Directors, Dark Mild and Light Ale. S&N will retain the remaining equity and continue to sell and distribute Courage brands via its direct regional on-trade business.

W&YBC will promote the brands among its own clients and look for new UK listings. It will also take on existing S&N national pub accounts, wholesalers and the take-home sector.

“Part of this strategy is to optimise the use of the excellent brewing facilities at Bedford,” said John Dunsmore, MD of S&N UK.

“Sale of the Theakston brands back to family members in 2002 proved that this type of innovative deal can be beneficial for both parties and for niche brands,” added Dunsmore.

TGI Friday’s sold in £70m private equity deal

Whitbread has sold its chain of TGI Friday’s restaurants to ABN AMRO Capital and Carlson Restaurants Worldwide for £70.4 million. ABN AMRO Capital, the private equity business of ABN AMRO, will take a 60% stake in the business with US-based casual dining business Carlson holding the remaining equity.

Carlson already owns the TGI Friday’s franchise in the US and operates more than 980 restaurants, including 700 in its domestic market. The sale includes 45 restaurants with around 3,000 members of staff.

The transaction is set to complete in March with Barclays Bank providing senior debt facilities.

Paul Southwell, managing partner of ABN AMRO Capital’s UK buyout team said: “TGI Friday’s is a well-established brand in the US and one which we feel can be further developed in the UK. We are keen to guide the business through the next stage of its development.”

SABMiller to invest US$1.8bn in South America

sabmiller will invest US$1.8bn in its South American operations over the next five years in order to capitalise on the significant growth potential of the region.

The decision comes after the brewer recorded higher than expected sales volumes in South America in Q3. Lager volumes were up 12% on a pro forma basis and up 11% year to date thanks to “robust growth” in Peru and the successful launch of Peroni Nastro Azzurro and the relaunch of Club Colombia in Colombia.

The investment will be used to finance upgrades to the group’s brewing capability, for point of sale improvements, to develop route to market networks and for new packaging.

The South African company has already invested US$175m in a new brewery in Cali and will replace over 700 million bottles and 25m crates as part of the programme.

SABMiller subsidiary Backus and Johnston has already announced that it will spend US$102m on expanding its facilities at Ate and Motupe while SABMiller has spent US$12m on fridges, coolers and other equipment to ensure that the product can be accessed cold across the country.

Brewers are big in Japan

Japanese beer companies shake up their offering and gain investor approval despite reports of a stagnating beer market in Japan both Sapporo and Kirin saw their share price rise significantly last quarter. Sapporo shares increased by more than 25% after the company won investors’ confidence by acquiring a 95.8% stake in Canadian brewery Sleeman and agreeing to buy the brewing facilities of regional brewer Ginga Kogen Beer for JPY500 million (US$4.3m).

Increasingly, Japanese brewers are  diversifying away from beer by investing in wine and spirits groups. Kirin’s recent decision to buy a majority stake in Mercian wine group has met with the market’s approval. Its share price rose by over 18% last quarter. Kirin’s sales increased by nearly 5% in 2006 – the second year it has reported an increase.

However, Asahi is still leading the Japanese beer market despite Kirin occupying the number one position for the first nine months of the year. Sales of Asahi beer and beer-type drinks dipped by 3.1% last year but the brewer is still holding the attention of the market and rose over 9% last quarter.

Meanwhile, Diageo’s share price rose more than 5% amid speculation that it is to make a bid for the Rémy Cointreau group.

This graph below shows the MSCI Hotels, Restaurants and Leisure Index outperforming both the MSCI ACWI Beverages and MSCI ACWI Food Products Indices despite retailers reporting record alcoholic beverage sales.

© db Febuary 2007