The Chateau Montelena deal may be dead and we may never know all the reasons why. I still believe that Montelena’s owner Jim Barrett wanted to sell the winery and was elated to have a buyer. Whether he changed his mind and wants to keep the property, or the economy changed the would-be buyer's mind and forced him to rethink his strategy, is unknown. (When the Montelena sale was announced in July, the euro was at $1.60 U.S. dollars; when the sale was called off, it was at $1.29. That translates to an increased cost of approximately $30 million for the estimated $120 million to $150 million purchase price.)
But Montelena's buyer-to-be, Michel Reybier, is still interested in a Napa Valley property, according to Jean-Guillaume Prats, speaking on his behalf.
"The termination of sale agreement with Chateau Montelena is not of our own will," Prats wrote in an e-mail to me. "The financial crisis and the resulting economic uncertainties did not permit [us] to conclude this acquisition for the time being. Monsieur Michel Reybier disagrees with the way Jim Barrett explained the reasons of this termination but refuses to argue about it in any way."
Prats added, "I was in Napa last week, visiting some of the greatest estates of the valley to further understand the region, as we very much hope to go forward with our projects in California."
This should be a busy time for buyers such as Reybier and sellers seeking entry or exit from the wine business.
Realtors speaking off the record say there are many wineries in Napa that are for sale, or wineries that would gladly entertain offers. They also say there are plenty of lookers interested in buying.
One winery, Kirkland Ranch, has gone public with its intent to sell its facility and vineyards. It is seeking $22 million through a sealed-bid auction, less than half of the previous value, according to agents representing the Napa winery.
Its sale should be telling. It’s a state-of-the-art winery built in 1998, large (57,000 square feet), with a permit for 200,000 gallons but with enough size for double that volume.
Agents say 100 acres are under vine, with another 100 plantable. The location is on Jamieson Canyon Road, which connects Napa near the airport with Fairfield.
It’s getting hard to build a winery of this size in Napa. And it may be even harder selling a winery of this size, especially one with a name that lacks cachet.