American multi-millionaire Bill Foley is planning to take a controlling stake in an NZAX-listed wine company as part of expansion plans in New Zealand.
Foley, who owns the luxurious Wairarapa Wharekauhau estate, wants to merge with The New Zealand Wine Company.
He is due to return here next month to promote The Society, a new wine and luxury accommodation business he has launched, and will then host dinners in Auckland and Wellington.
Foley made his money from insurance, is a chairman of two Fortune 500 companies and is now planning to take what has been reported as a controlling stake in the NZAX-listed company.
In December Grant Samuel was appointed to advise the listed wine company on capital restructuring to satisfy an agreement reached with the ANZ National Bank to raise a minimum of $5 million before June 30 and to reduce bank debt by a minimum of $5 million.
Grant Samuel identified and pursued interest from a number of trade investors and The New Zealand Wine Company is exploring a proposal targeted at merging with the Foley Family Wines New Zealand business, the company said. An extraordinary general meeting is due to be held for shareholders to vote on the deal and Overseas Investment Office approval will be needed.
According to Forbes, Foley is worth about US$600 million and has spent the past few years buying distressed wineries, investing more than US$200 million ($264.3 million) from California to New Zealand.
The New Zealand Wine Company chairman Alton Jamieson said Foley had lodged an application with the NZX Takeovers Panel, an independent advisers' report would be issued soon and an extraordinary meeting would be held in Blenheim although no date has been set yet.
Jamieson with just over 11 per cent is the largest shareholder and the company's main brands are Grove Mill and Sanctuary.
"We've been through a capital restructuring process for some time and this proposal resolves these issues," Jamieson said.
"As far as the proposal is concerned, it satisfies that," he said.
"The wine business these days is about scale and collectively the scale of both companies is greater and would enable a merged entity to compete more effectively."
Foley this month told overseas publication Wine Spectator of his intentions. It reported on how he was putting the finishing touches on merging his firm, pending Government approval and how the takeover would put 80 per cent of the combined wine company in Foley's hands.
The New Zealand Wine Company owns 76ha in Marlborough, mostly in sauvignon blanc, and produces 300,000 cases a year. The merger would double Foley's volume in New Zealand, the publication said.
"[The] New Zealand Wine Company has suffered extensive losses in the past year, evidence, some analysts say, that there is a glut of wine being made in the country," Wine Spectator said.
"But Foley claims the problem is effective exporting of all that wine.
"[Foley said] 'When I bought Clifford Bay, it didn't have distribution in the United States. This year we'll bring 75,000 cases to the US. The small New Zealand brands have trouble getting attention here'."
Mark Turnbull, Foley's representative in New Zealand, yesterday said Foley wanted an NZX presence.
"This is consistent with what Bill said in February that he wanted to have a listed company and this is an important step along the way," Turnbull said.