Wine Industry Report

on Monday January 16th, 2006 - Media Release

The Takeovers panel advises that it has received an application dated 15th January 2006 from Mr John Hempton, s shareholder in Dromana Estate Limited (Dromana), and Mr Simon Maher, a director of a corporate trustee for a trust that is a shareholder of Dromana (together known as shareholders), in relation to a 1 for 1 non-renounceable rights issue (Rights Issue) to be conducted by Dromana, the terms of which are set out in a prospectus dated 11th January, 2006.

The Rights Issue is jointly underwritten by entities associated with three of the four directors of Dromana. The Rights Issue seeks to raise $1.5m and is underwritten by the Directors to the extent of $1m.

The Shareholders’ application alleges that unacceptable circumstances exist in relation to the Rights Issue and the above underwriting agreement. The application submits that the Rights Issue and the underwriting agreement are likely to deliver control of Dromana to the Directors at a deflated price.

The Shareholders’ seek interim orders that:

The Panel has not decided whether to conduct proceedigs in relation to the application and makes no comment on the merits of the application. It also notes that it has not received submissions from the other parties to the application.

The President of the Panel is appointing a sitting Panel to consider the application.

Nigel Morris
Director, Takeovers Panel.