UK wine producer Chapel Down could be sold as funding review launched
25/06/2024 08:29
By Sarah Young
LONDON, June 25 (Reuters) - Britain's biggest wine
producer Chapel Down CDGP.L is considering putting itself up
for sale as part of a review into options to fund its future
growth as it plans to plant new vineyards and build a new
winery, it said on Tuesday.
"As part of the review, the board will consider all
alternatives, including investment from existing shareholders,
investment from new shareholders, a sale of the company, and
other relevant transactions," the company said.
Its shares on Britain's junior AIM market closed on Monday
at 65.5 pence, giving it a market value of 112 million pounds
($142 million).
Founded in 2002, Chapel Down is based in Kent, southeast
England, and has grown into Britain's best-known and largest
producer with last year's harvest expected to make about 3.4
million bottles of sparkling and still wines.
While England's wine industry is still small scale,
temperatures warmed by climate change have in recent decades
provided better growing conditions for grapes, and there is
strengthening demand for local fizz in the home market.
The quality of the wines being produced in England has also
attracted international interest.
Taittinger and Pommery, two of France's best-known Champagne
houses, have bought land and planted vines in England, while the
world's biggest sparkling wine company, Henkell Freixenet,
acquired an English wine estate, Bolney, in 2022.
"There can be no certainty that a transaction will be
pursued by the company, nor as to the terms of any eventual
transaction," Chapel Down said in a statement.
The company said that Rothschild & Co was acting as the lead
financial adviser in relation to the strategic review.
After posting revenue of 18 million pounds ($23 million) for
2023, the company said it was on track for double-digit sales
growth in 2024 and added it had a strong balance sheet with
headroom on its debt facility of 12 million pounds and a deal to
extend this facility.
($1 = 0.7884 pounds)
(Reporting by Sarah Young, editing by James Davey and Anil
D'Silva)
((sarah.young@thomsonreuters.com; +44 20 7542 1109; Reuters
Messaging: sarah.young.thomsonreuters@reuters.net))