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): August 23, 2002
THE CHALONE WINE GROUP, LTD.
______________________________________________________
(Exact name of registrant as specified in its charter)
California 0-13406 94-1696731
________________________________________________________________________________
(State or other jurisdiction (Commission (I.R.S Employer
of incorporation) File Number) Identification No.)
621 Airpark Road
Napa, California 94558
____________________________________________________________
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (707) 254-4200
ITEM 5. OTHER EVENTS.
On August 27, 2002, the Company announced that, on August 23, it had completed
the acquisition of the winery and vineyard site formerly known as Beaucanon
Winery in Rutherford, California. The site will be used as the home for the
Provenance Vineyard brand. The purchase price was $8.9 million.
The acquisition was funded by the issuance of two convertible subordinated
promissory notes in exchange for $11 million in cash (the "Notes"). The Notes
were issued to Les Domaines Baron de Rothschild (Lafite) ("DBR"), in the amount
of $8.25 million, and SFI Intermediate Limited or its affiliates ("SFI"), in the
amount of $2.75 million. The Notes accrue interest on the principal sum at a
rate of 9% per annum. The principal sum and all accrued interest is due and
payable in full, two years from the date of the Notes (the "Maturity Date"). At
the Maturity Date, Chalone may elect to pay all of the outstanding principal and
accrued interest in cash or may elect to repay all or part of these amounts
through conversion into shares of Company common stock at a conversion price of
$9.4207 per share (the "Conversion Price"). DBR or SFI may elect to convert all
outstanding principal and accrued interest to shares of Company common stock at
the Conversion Price only in the event of a change of control transaction, as
defined in the Notes.
Prior to the transaction, DBR and SFI beneficially owned 42.4% and 17.2%,
respectively, of the common stock of the Company. Upon conversion of the Notes,
DBR and SFI would beneficially own 45.5% and 17.9%, respectively, of the common
stock of the Company.
In conjunction with the above activities, the Company, its lenders under the
Company's Credit Agreement and its noteholders under the Company's Amended and
Restated Note Purchase Agreement amended the Company's Credit Agreement and its
Amended and Restated Note Purchase Agreement (1) to reflect the lenders' and
noteholders' consent to the Beaucanon acquisition and the issuance of the Notes
and (2) to make certain amendments in the Credit Agreement and the Amended and
Restated Note Purchase Agreement, including the exclusion of the Notes from the
financial covenants contained in those agreements.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Press release issued by the registrant dated August 27, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: September 6, 2002 The Chalone Wine Group, Ltd.
(Registrant)
By: /s/ SHAWN CONROY BLOM
_______________________
Shawn Conroy Blom
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
99.1 Press release issued by the registrant dated August 27, 2002.