Accolade Wines ready for a deal with Pernod Ricard

Grape prices have hurt the wine industry. They are now at $357 a tonne, according to Wine Australia, down 11.5 per cent on the previous corresponding year. Picture: iStock

The Bain Capital-controlled Accolade Wines has kept the door open for a deal with Pernod Ricard instead of a back-door listing with Australian Vintage, sources say, despite advanced talks with the latter.

DataRoom understands that Accolade, which has brands including Hardys, St Hallett and Grant Burge, has been looking at both Pernod Ricard and Australian Vintage.

That was part of a dual-track process which is understood to be continuing.

Pernod Ricard, which owns Australia’s Jacob’s Creek and New Zealand’s Brandacott Estate, has had a suite of Australian assets up for sale through JPMorgan and Morgan Stanley, while the listed Australian Vintage has been in talks with Bain Capital about a backdoor listing of its Accolade into the business.

It is understood Accolade and Australian Vintage carried out due diligence on each other and that the talks were well advanced amid a tough environment for the wine industry because of weaker demand and rising costs.

However, there have been growing concerns that Bain may walk away from its plans to bring the business together with Australian Vintage following the departure of its chief executive Craig Garvin, which the company says is related to workplace behaviour.

Garvin is now considering a defamation and wrongful dismissal case against his employer, as The Australian reported earlier.

Bain gained control of Accolade in the past year as the lead in a lender group.

It was previously controlled by The Carlyle Group, which purchased the business in 2018 for $1bn.

The parent entity that owns Accolade Wines is controlled by Bain, Intermediate Capital Group, Capital Four, Sona Asset Management and Terry Asset Management.

Accolade is one of the largest wine companies in the world.

E&P Corporate Advisory has been working for Australian Vintage, which has a market value of close to $90m and has brands including Tempus Two and McGuigan.

Its share price has collapsed by more than 90 per cent from its peaks two decades ago.

Net debt for the six months to December was $68m. It reported a $2.8m interim net profit, down 78 per cent.

Grape prices have hurt the industry. They are now at $357 a tonne, according to Wine Australia, down 11.5 per cent on the previous corresponding year.

Many pin their hopes on the reopening of China exports.

Industry consolidation will create extra presence, synergies and efficiencies to better compete in what is an increasingly tough market.