Exhibit 99.1
The Robert Mondavi Corporation Announces Receipt of Unsolicited Proposal;
Company to Pursue Previously Announced Recapitalization Plan
NAPA, Calif.--(BUSINESS WIRE)--Oct. 18, 2004--The Robert Mondavi
Corporation (Nasdaq:MOND) announced that it has received an unsolicited proposal
to acquire the company subject to certain terms and conditions. The proposal was
reviewed by the company's Board of Directors which concluded not to reject the
proposal but to consider it as part of its on-going process to maximize value
for all of its shareholders. The Board did, however, decline a request in the
proposal to suspend implementation of its previously announced recapitalization
plan.
The Robert Mondavi Corporation has reaffirmed its intent to seek
shareholder approval, at the Annual Meeting, for its recapitalization plan which
transfers the company's domicile to Delaware and converts its two class equity
structure, where the Mondavi family Class B shareholders have 10 votes per share
and the Class A shareholders have one vote per share, into a single class of
shareholders with equal voting rights. That shareholder vote is scheduled to
take place on November 30, 2004.
"We remain fully committed to a process that maximizes value to our
shareholders," said Chairman Ted Hall. "We believe strongly that our proposed
recapitalization plan is important to achieving full value for our shareholders
and that our shareholders are best served by exercising their rights in a 'one
share, one vote' structure. Therefore, we intend to proceed with our previously
announced plan to recapitalize the company and incorporate in Delaware while
continuing to carefully evaluate all strategic options. We will be able to
effectively act upon all of our options following the approval of the
recapitalization plan at our upcoming annual meeting of shareholders," Hall
added.
The Board of Directors of The Robert Mondavi Corporation considered a wide
range of strategic alternatives prior to announcing last month a strategic plan
to focus entirely on the premium and super-premium lifestyle wine segments, to
divest its luxury wine and other non-strategic assets and investments for
estimated net after-tax proceeds of $400 million to $500 million within one
year, providing the company with financial flexibility to pursue value-enhancing
strategic and financial opportunities. "Given our in-depth knowledge of the
luxury assets and the complex nature of our joint venture arrangements, we
believe we are uniquely qualified to seek the highest value from these assets,"
said CEO Greg Evans. The estimated proceeds from asset divestitures assume all
such assets can be sold under current wine industry and general economic
conditions.
The company has stated that it believes that successful implementation of
this strategic course will enable it to generate, from the revised fiscal 2005
base, earnings before interest and tax ratios of approximately 20% and financial
returns in excess of 12% within five years. "We will continue to evaluate our
current and projected performance and explore vigorously the options and
alternatives for each of our businesses, and for the company as a whole, in
pursuit of maximum shareholder value," said Hall.
Important Information For Investors And Shareholders
In connection with the proposed recapitalization plan, The Robert Mondavi
Corporation has filed a preliminary combined proxy statement/prospectus and will
file a definitive version of such document and other relevant documents with the
Securities and Exchange Commission (the "SEC"). INVESTORS AND SHAREHOLDERS ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AS IT
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE RECAPITALIZATION PLAN AND RELATED
MATTERS. INVESTORS AND SHAREHOLDERS WILL HAVE ACCESS TO FREE COPIES OF THE
DEFINITIVE PROXY STATEMENT/PROSPECTUS (WHEN AVAILABLE) AND OTHER DOCUMENTS FILED
WITH THE SEC BY THE COMPANY THROUGH THE SEC WEB SITE AT WWW.SEC.GOV.
THE PROXY STATEMENT/PROSPECTUS AND RELATED MATERIALS MAY ALSO BE OBTAINED
FOR FREE (WHEN AVAILABLE) FROM THE COMPANY BY DIRECTING A REQUEST TO THE
COMPANY'S INVESTOR RELATIONS DEPARTMENT AT 841 LATOUR COURT, NAPA, CA 94558;
TELEPHONE (707) 251-4850; E-MAIL MOND@ROBERTMONDAVI.COM.
The company and its directors, executive officers, certain members of
management and employees may be deemed to be participants in the solicitation of
proxies in connection with the proposed merger. Information regarding the
persons who may, under the rules of the SEC, be considered to be participants in
the solicitation of the company's shareholders in connection with the proposed
recapitalization plan is set forth in the company's annual report on Form 10-K
for the fiscal year ended June 30, 2004 filed with the SEC on September 10, 2004
and proxy statement for its 2003 annual meeting of shareholders filed with the
SEC on October 28, 2003. Additional information regarding such persons and a
description of their direct and indirect interests in the recapitalization plan
will be set forth in the proxy statement/prospectus when it is filed with the
SEC.
Cautionary Statement Regarding Forward-Looking Statements
This announcement and other information provided from time to time by the
company contain historical information as well as forward-looking statements
about the company, the premium wine industry and general business and economic
conditions. Such forward-looking statements include, for example, the
anticipated approval of the company's proposed recapitalization plan by its
shareholders, other statements regarding the announced restructuring and the
amount of the related charges, the estimate of proceeds from the sale of assets,
projections or predictions about the company's future earnings before interest
and tax ratios and financial returns, consumer demand for its wines, including
new brands and brand extensions, margin trends, anticipated future investment in
vineyards and other capital projects, the premium wine grape market and the
premium wine industry generally. Actual results may differ materially from the
company's present expectations. Among other things, a soft economy, a downturn
in the travel and entertainment sector, risk associated with continued conflict
in the Middle East, reduced consumer spending, or changes in consumer
preferences could reduce demand for the company's wines. Similarly, increased
competition or changes in tourism to our California properties could affect the
company's volume and revenue growth outlook.
The supply and price of grapes, the company's most important raw material,
is beyond the company's control. A shortage of grapes might constrict the supply
of wine available for sale and cause higher grape costs that put more pressure
on gross profit margins. A surplus of grapes might allow for greater sales and
lower grape costs, but it might also result in more competition and pressure on
selling prices or marketing spending. Interest rates and other business and
economic conditions could increase significantly the cost and risks of projected
capital spending. The restructuring announced on September 14, 2004 may impair
management's ability to focus on other needed areas of business execution. There
are also significant risks associated with the restructuring, including the
divestiture of the company's luxury wine assets and investments and
non-strategic assets announced on September 14, 2004. There is no assurance that
the company will successfully complete the divestitures within the company's
expected timeframe or at all, or that it will realize the after-tax proceeds it
presently estimates for such divestitures. There is no assurance the company
will be able to effectively re-deploy any proceeds received from such
divestitures. The lay-offs and significant restructuring charges announced in
connection with the company's September 14, 2004 restructuring will materially
affect future earnings. There is no assurance that the proposed restructuring
will enable the company to achieve significant cost savings or asset
rationalization, or if any cost savings or assets rationalization is achieved,
that it will be sufficient to grow the company's volumes, profit or cash flow,
or to enhance the company's competitive position. For additional cautionary
statements identifying important factors that could cause actual results to
differ materially from such forward-looking information, please refer to Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," in the company's Annual Report on Form 10-K for the fiscal year
ended June 30, 2004, on file with the Securities and Exchange Commission. For
these and other reasons, no forward-looking statement by the company can nor
should be taken as a guarantee of what will happen in the future.
CONTACT: The Robert Mondavi Corporation
Robert Philipps, 707-251-4850 (VP, Treasury & IR)
Hilary Martin, 707-251-4487 (VP Corporate Communications)