UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 3, 1999
The Chalone Wine Group, Ltd.
(Exact Name of Registrant as Specified in Charter)
California 0-13406 94-1696731
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
621 Airpark Road
Napa, California 94558-4291
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 707-254-4200
Item 2. Acquisition or Disposition of Assets
On January 24, 2000, The Chalone Wine Group, Ltd. (the "Company")
entered into a binding commitment to acquire two adjacent parcels of land in
Rutherford, California (the "Property"). The Property, comprising 73 acres,
contains two private homes and an historic 57-acre cabernet sauvignon vineyard
in the Napa Valley's notable Rutherford Bench area.
The Rutherford Bench is well known for the production of cabernet
sauvignon wines. The Company's new vineyard is situated close to the vineyards
of well-known cabernet sauvignon wines, such as "Georges de Latour Private
Reserve" from Beaulieu Vineyards, "Rubicon" from Neibaum Coppola Estate Winery
and "Cabernet Bosche" from Freemark Abbey. The Company intends to use the
property to produce a luxury-priced single vineyard cabernet wine. The new wine
is expected to debut in 2004 with an estimated initial release of approximately
3,000 cases. Ultimately, the Company expects the 57-acre vineyard to produce up
to 20,000 cases of luxury quality wine.
The two private residences acquired with the Property are located at
1865 and 1877 St. Helena Highway. The dwelling located at 1865 St. Helena
Highway is encumbered by a two -year, rent-free lease between the Company and
the current occupant. Upon the termination of the foregoing tenancy, the Company
intends to use the dwelling for marketing purposes and as a guesthouse for trade
and press.
The second dwelling, located at 1877 St. Helena Highway, is expected to
be re-sold together with approximately 5 acres of land, for continued use as a
private residence.
Pursuant to the terms of the Purchase Agreements (attached hereto as
Exhibits 10.2 and 10.3 and incorporated herein by reference), the Company
acquired the parcels in separate transactions from Barbara Eisele and The
William A. Hewitt Trust for a total of approximately $16,400,000. The source of
funding for the purchase was the Company's existing line of credit with Rabobank
International.
FORWARD LOOKING STATEMENTS
From time to time, information provided by the Company, statements made
by its employees, or information included in its filings with the Securities and
Exchange Commission (including this Form 8-K) may contain statements which are
not historical facts, so called "forward looking statements" that involve risks
and uncertainties. Forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. When
used in this Form 8-K, the terms "expects," "intends," and other similar terms
as they relate to the Company or its management are intended to identify such
forward looking statements. The Company's actual future results may differ
significantly from those stated in any forward-looking statements. Factors that
may cause such differences include, but are not limited to (i) reduced consumer
spending or a change in consumer preferences, which could reduce demand for the
Company's wines; (ii) competition from numerous domestic and foreign wine
producers which could affect the Company's ability to sustain volume and revenue
growth; (iii) interest rates and other business and economic conditions which
could increase significantly the cost and risks of projected capital spending;
(iv) the price and availability in the marketplace of grapes meeting the
Company's quality standards and other requirements; (v) the effect of weather
and other natural forces on growing conditions and, in turn, the quality and
quantity of grapes produced by the Company and (vi) worldwide supply and demand
for grapes. Each of these factors, and other risks pertaining to the Company,
the
premium wine industry and general business and economic conditions, are more
fully discussed from time to time in other filings with the Securities and
Exchange Commission, including the Company's annual report on Form 10-K for the
year ended March 31, 1999.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Not required
(b) Pro Forma Financial Information.
Not required.
(c) Exhibits.
Exhibit No. Description
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10.2 Real Estate Purchase Contract by and between
Barbara Eisele and the Company, dated December 3,
1999
10.3 Real Estate Purchase Contract by and between
William A. Hewitt Trust and the Company, dated
December 3, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: February 8, 2000
THE CHALONE WINE GROUP, LTD.
By: /s/ Thomas B. Selfridge
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Thomas B. Selfridge
Chief Executive Officer