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Madison Wine in talks to buy stake in Acker
Hong Kong wine merchant Madison Wine has entered into talks with auction house Acker Merrall & Condit to buy 45% of the business.
The share purchase is expected to initially involve the acquisition of Acker’s Hong Kong business, but could result in a further takeover of Acker’s remaining assets in the US, where it is based.
The terms and the consideration of the acquisition are still subject to further negotiations between the parties, sources said, and a due diligence assessment will also be made. Madison Wine is expected to pay with two cash instalments.
It is understood that Madison Wine and Acker Merrall will continue to operate independently after the proposed acquisition.
Madison Wine raised HK$56.3 million (approximately US$7.2 million) in October 2015 at its debut listing on the second board of the Hong Kong Stock Exchange.
At the end of its first trading day on 8 October 2015, Madison’s shares traded up over 720% to close at HK$6.20 a share, compared to HK$0.75 its listing price.
Its shares closed at HK$11.50 yesterday, with a trading volume of 2.25 million shares.
New York-based auction house Acker Merrall & Condit has affiliated companies in Hong Kong, New York and Chicago, and is principally involved in fine wine auctions and online wine sales.
Acker Merrall & Condit started as a wine shop on the Upper West side of Manhattan in 1820, making it America’s oldest wine retailer.
In 1998, president and CEO John Kapon, a third-generation wine merchant, diversified the family wine business to conduct independent, live auctions in New York City.
Ten years after its first auction in New York City, in 2008 Acker Merrall became the first to hold a sale in Asia on 31 May 2008, at a time when the Asian market saw high demand for fine and rare wine.
During its fast-tracked rise to become the world’s largest wine auction house, Acker also suffered its share of mishaps, in connection with fake bottles of fine and rare wine sold by convicted fraudster Rudy Kurniawan.
Madison Wine’s board, of which Debra Meiburg MW is one of its three Independent Non-Executive Directors, believes that the proposed acquisition, if materialised will increase the company’s reputation in the wine industry and bring long-term strategic, operational and financial benefits to the company.