The Ping-Pong bidding war for Golden State Vintners Inc. escalated as San Francisco-based Wine Group increased its cash offer for the bulk-wine producer to $82 million, topping the latest proposal from a group led by Golden State Chief Executive Jeffrey O'Neill.
Wine Group's new offer amounted to $8.25 in cash for each Golden State share, a 3.4% premium over the company's closing stock price Monday of $7.98. After Golden State disclosed the new bid Tuesday, Wall Street pushed the firm's shares higher Tuesday and Wednesday. They closed Wednesday at $8.31, up 1 cent, on Nasdaq.
The O'Neill group had most recently offered $7.80 a share. Either bidder, if successful, would also assume $29 million in debt. Golden State has agreed to negotiate in good faith with the O'Neill group until today.
Last week, the O'Neill group said it had arranged financing from Constellation Brands, the world's largest wine company that is also an important customer of Golden State. Constellation and Wine Group are among the biggest producers of mass-market wines.
Tuesday's offer was the latest in what has been several rounds of bidding since early March, when the O'Neill group made its initial offer of $6.85 a share.
Wine Group bottles wine under the Franzia, Glen Ellen and other labels.