Media hype will keep GRB moving up on Monday, its been splased all over the fincial papers regarding Woolies.
Woolworths takes 25% stake in Gage Roads 15-May-09
Two weeks after Gage Roads Brewing Co cancelled a distribution deal, the brewer has agreed to supply beer to major retailer Woolworths, which will take a 25 per cent interest in the company.
Gage Roads said on Friday it has entered into an agreement with Woolworths to supply 350,000 cartons of beer each year to the supermarket chain if the offer is successful.
Under the offer, which is subject to shareholder approval, Woolworths will acquire a 25 per cent stake in the brewer through a placement of 76.4 million fully paid ordinary shares to raise up to $1.9 million.
Following the placement, Woolworths will have an appointee on the brewer's board with Woolworths Liquor Group general manager Steven Greentree becoming a non-executive director.
Gage Roads' chief executive Nick Hayler said the company was delighted to welcome Woolworths as a major shareholder and customer.
He said planning had commenced to maximise brewing capacity from the company's WA brewery operations.
Gage Roads will hold a general meeting in late June at which shareholder approval will be sought.
Shares in Gage Roads jumped 54 per cent or 2.7 cents to a high of 7.7 cents before easing to 6.6 cents at 11:07 AEST.
Late last month, Gage Raods cancelled its distribution agreement with VOK Beverages, deciding to go it alone in order to provide products to a broader customer base at a more competitive price.
GRB Price at posting:
6.0¢ Sentiment: Buy Disclosure: Held
