Family buyout plan for McWilliam’s Wines after private equity bid lapses

A family member has proposed a buyout of the collapsed McWilliams Wines, after a private equity bid crashed.

McWilliam’s Mount Pleasant Wine and Food Estate in the NSW Hunter Valley.

Former McWilliam’s Wines ­director David McWilliam has put forward a buyout plan for the scuttled winemaker after a $46m private equity bid collapsed.

The 141-year-old winemaker crashed into voluntary administration in early January last year after suffering years of losses totalling $90m.

Private equity buyer Prcstnt — pronounced “persistent” — lobbed a $46m takeover bid in July that would have given creditors 94c-100c in the dollar.

But Prcstnt pulled out in December, as Chinese bans hit Australia’s wine industry.

Mr McWilliam said there was logic to the decision by Prcstnt and its Chinese backers to walk away from the deal.

However, the bid by Prcstnt, which already operates in the food and agriculture sectors, allowed the bidders an insight into one of Australia’s largest winemakers.

Mr McWilliam said that while his plan to recapitalise the business would see existing family shareholders cut out of a financial return, many supported it.

“Our desire is to see the ­McWilliam’s business live to fight another day, with a family member leading the charge, rather than being broken up,” he said.

“There is a lot of goodwill among the McWilliam’s Wines suppliers, staff, customers and consumers, and we are working closely with HLB Mann Judd Sydney to structure a deal for the administrators that respects these stakeholders and creates an ongoing relationship into the future, instead of heading down the liquidation path.”

However, Mr McWilliam appears to be focused on a similar path as the Prcstnt bidders, suggesting the business expand “in due course” to global markets as well as boost its domestic distribution.

“The near-term focus will be on shifting to a customer-led organisation, and partnering with our customers to restore and expand distribution dom­estically,” he said.

“Over the medium term we will drive export growth with strategic partnerships across the traditional international markets including the UK, US and Canada where McWilliam’s is well known.”

More than 80 shareholders will now decide on Mr McWilliam’s plan to relaunch the winemaker, something Mr McWil­liam pointed to as an example of a long-term weakness that has undermined the business structure.

“Unlike a lot of family businesses, the McWilliam’s family business has a very wide ownership structure of over 80 shareholders,” he said.

“This has meant that no one in the family has a strong individual financial incentive or stomach to turn things around. Nor has it been easy for this wide collective of family members to agree on the correct strategy.”

But Mr McWilliam said the business’s strong assets, including an expected 20,000-tonne 2020 vintage, would backstop the business. “But most importantly there is considerable value in the people who remain committed to the business and producing quality wine,” he said.

HLB Mann Judd partner Simon James said McWilliam’s had an extensive and valuable portfolio of wines, vineyards, plant and equipment as well as its well-known brands Mount Pleasant and McWilliam’s.

“McWilliam’s Wines Group is an iconic Australian business that has strong potential for future growth under the right leadership,” Mr James said.