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Australian Whisky Holdings makes $10m bid for Lark Distillery

Private equity group Australian Whisky Holdings (AWY) has announced its intention to purchase Tasmanian spirits producer Lark Distillery for AU$10.7 million (US$8.3m).

Bill Lark, founder of Lark Distillery in Tasmania
Bill Lark, founder of Lark Distillery in Tasmania

AWY completed its AU$3m acquisition of The Nant Group in August last year, taking ownership of all whisky production assets including shares in Lark Distillery. The deal also included a 12% share in Tasmanian whisky producer Redlands Estate.

AWY, which is currently in an ASX trading halt, holds approximately 48.12% of the shares in Lark.

The firm is offering existing Lark shareholders to choose whether to receive either 12,500 AWH shares or AU$400 for every Lark share they own.

If all Lark shareholders accept the offer then AWH is liable for a cash bill of AU$10,708,800 or an issuance of 334,650,000 AWH shares or a combination of the two.

AWH has said that it has not issued a minimum acceptance condition on Lark shareholder and until all acceptances are known, AWH will not know its level of Lark ownership.

Established in 1992, Hobart-based Lark Distillery produces a range of spirits including its flagship Lark Single Malt Whisky and Forty Spotted Rare Tasmanian Gin.

Lark also owns Tasmanian spirits producer Overeem Distillery, which it acquired in January 2014.

In its statement to the ASX, AWH said: “As previously announced, AWY’s business strategy is to pursue partnerships with selected distilleries in the Australian craft whisky industry.”

“The vision of AWY is to have equity holdings, if not ownership, in a number of premium single malt whisky producers in Australia, focusing in particular on Tasmania. AWY proposes to accelerate growth in the craft whisky industry ahead of competitors and take a leadership position in the industry. In doing so, AWY intends to lead the structuring and development of, and be instrumental in, defining the final shape of the craft whisky industry in Australia and maintaining Tasmania’s leadership position in this country.

“AWY believes by doing this, it will provide current craft producers a platform to increase volume and it will give each brand an ability to increase profits and distribution into higher margin markets in Asia.

AWH also said that the offer to purchase the shares is being made conditional upon completion of its capital raising, and the obtaining of any necessary ASX approvals and that the offer will be open until 20 April 2018.

In August last year, AWY claimed that more than 700 whisky casks sold under Nant Distilling Company’s barrel investment scheme “have never been filled and don’t exist”.

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