EVANS & TATE AND CRANSWICK MERGE

Published: 23 July, 2008

Evans & Tate and Cranswick Premium Wines Limited have confirmed that they are merging, to form Evans & Tate Limited' - one of Australia's largest fully integrated wine companies. Franklin Tate will be executive chairman of the merged group and Graham Cranswick-Smith will be deputy chairman. Cranswick shareholders will receive four ordinary fully-paid Evans & Tate shares for every seven shares they hold, plus a cash payment of A$2.60. At the 12 June Evans & Tate share price of A$1.46, this equates to an all-up consideration of A$1.20 per share, which represents a premium to the current Cranswick share price of approximately 26%. This transaction price reflects the amended Cranswick net tangible asset of A$1.15 per share, following its revised profit forecast of today. In addition, subject to the transaction proceeding (but prior to its completion), Cranswick shareholders will receive a final, fully-franked dividend of A$0.02 per share. This transaction values Cranswick at A$57 million. Tate said: This is a clear recognition of the complementary strengths of both companies. Evans & Tate has an excellent penetration of the domestic wine market, with our bottle sales in Australia exceeding 85% of total annual sales, while Cranswick Premium Wines is one of Australia's great export success stories. Barramundi enjoys global recognition with excellent potential for further growth,' he added. Furthermore, this will open up new market opportunities for Evans & Tate in the sub-A$10 (or equivalent) category in both Australia and overseas, given Cranswick's impressive low-cost production capabilities. We are committed to expanding both parts of the business with key focus on earnings, return on funds employed and increasing shareholder value.' Cranswick's founder and chief executive, Cranswick-Smith, said: The fit between these two businesses is excellent. The globalisation of the wine industry means that a supplier now has to be able to offer the full spectrum of wines, from premium restaurant to high-volume supermarket brands. This merger will give us the size and critical mass to make a difference and to take advantage of the major growth opportunities for Australian wine companies.' Mike Awin, managing director of Cranswick Premium Wines (Europe), said: This merger will strengthen the company's position both in the UK and Continental Europe, with a broader portfolio of wines and new resources to realise the next stage of the ambitious marketing drive we have already put in place.'

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