The Wine Fund has agreed to take a placement of 7.5 million shares at $1.05 per share, cum rights and dividend. It will also participate in the Company’s 1 for 10 rights issue at $1.04 per share, anticipated in October 2003.

The Wine Fund has been in negotiation and due diligence with Evans & Tate for the past 5 months but was waiting for the Evans & Tate Board to approve the transaction, and for the finalisation of our Unitholders’ vote on 24 July on the future of the Wine Fund (which voted 65% in favour of the continuation of the Wine Fund).

The placement price of $1.05 is a 10% discount on the 20-day volume weighted average share price at 18 August 2003.

A leading Australian Wine Company

After a review of both public and private wine groups in Australia, Berren believes that Evans & Tate has the hallmarks of an emerging mid-size player in the Australian and international wine markets. As a national company, with operations in 4 key states, it has the opportunity to make a real impact alongside the large wine companies operating from Australia.

Mr Chris Day, CEO of Berren said, "Following the Constellation merger with BRL Hardy some 7 months ago, the Wine Fund has conducted an extensive review of the Australian wine industry to locate a potential success story of similar opportunity for us to invest in."

"Evans & Tate came up trumps for us! We like the corporate strategy, the focus, energy and vision of the Company and are very much looking forward to working closely with Franklin Tate and the Evans & Tate Wine Group organisation."

"Evans & Tate is now the 4th largest listed pure-wine company in Australia by market capitalisation, and as consolidation continues, we expect them to gain further strategic importance."

Mr Franklin Tate, Chairman and Chief Executive Officer of Evans & Tate said, "We are delighted that the Wine Fund has selected us as a major investment in the Australian wine industry. The industry’s prospects are excellent and we are excited with the array of opportunities in front of us."

Mike Terlet AO, the Chairman of Berren, said "…the Company has the opportunity to evolve as one of the leading mid-size wine groups in the rationalising Australian and international wine industries."

"We have had the opportunity to review the company, its business operations and its management team, ably lead by Franklin Tate. Berren believes that Evans & Tate can be an important partner to Australian retailers, and an alternative supplier to the existing major wine companies in key markets, such as the United Kingdom and mainland Europe. The need for a variety of key suppliers is well documented, and we believe that Evans & Tate will have this route to market, particularly in Australia and the UK."

"We welcome Franklin Tate’s further commitment to the group, through Grape Expectations Enterprises Pty. Ltd’s (a company owned and controlled by Mr Tate) participation in both the placement and the rights issue. We are always pleased when one of the key drivers of a business puts his or her own resources into the growth of that business. This is similar to our experience in France with Laroche and Gabriel Meffre, in Germany with Hawesko, and in the UK with Bibendum and Vinoceros."

Evans & Tate has evolved from a regional WA producer in 1999, to a top 10 leading national wine company by volume (and 12th by value) over the past 4 years. By capitalisation, it is now (including the Wine Fund and Fosters Group) the 6th largest wine group in Australia listed on the ASX. It has operations in WA’s Margaret River, Yarra Valley and Sunraysia in Victoria and the Riverina in NSW. It produces in excess of 2.4 million case equivalents and sells wines from $6 to $60 per bottle, all defined as "premium" wine sales.

An emerging class for Investment

Evans & Tate has made it clear to Berren that it wishes to grow its business organically and by further acquisitions over the next 5 years, providing the acquisitions (considered "bolt-ons") fit strategically and fulfil strict investment criteria guidelines. Further they wish to expand their presence in select wine consuming countries through distribution and other alliances. The Wine Fund believe that they can assist Evans & Tate in these endeavours using our network and resources to assist in this development.

"Evans & Tate has the opportunity to emerge as one of the leading national wine companies in Australia" said Chris Day.

"There are probably another 5 to 10 companies who can participate in this developing segment of the market, and Evans & Tate has the potential to be a leading participant. While the Wine Fund can continue to identify and invest in others, Evans & Tate has been the first emerging regional wine company to stand up and be counted in this new segment of the market, vacated by our four majors through the creation over the last 5 years of the mega wine companies, including Constellation’s Hardy Wine Company and Fosters’ Beringer Blass Wine Estates."

Other Opportunities