An heiress to one of the world's largest glassware and crystal companies has made an offer to buy the historic Château Le Gay in Pomerol from one of the appellation's established families. The price for the Right Bank winery is estimated at nearly $25 million, according to well-informed sources in Bordeaux.
In late August, Catherine Péré-Vergé, the daughter of late French industrialist Jacques Durand, who developed Verrerie Cristallerie d'Argues into a modern crystal manufacturer and industrial glassmaker in northern France, signed an option to buy Le Gay, sources said. If no obstacles crop up, the sale may be concluded in a couple of months.
The sellers decided to put Le Gay on the block as a way to save another family asset, Château Lafleur, one of the most famous wine estates in Pomerol, along with Château Pétrus. When Marie Robin, the unmarried, nonagenarian owner of Le Gay and Lafleur, died last December, she left the estates to five younger cousins. They had to come up with enough cash to pay the large estate taxes, according to heir Jacques Guinaudeau, who is also Lafleur's winemaker.
"The taxes in France make successions difficult," said Guinaudeau, 46, whose great-great grandfather, Henri Greloud, established châteaus Le Gay and Lafleur in the 19th century. "There were rumors that Lafleur was for sale, but it's never been for sale. We are selling Le Gay to pay for the heavy taxes. We've found a family solution so that Lafleur won't be sold."
Péré-Vergé acknowledged that she was interested in Le Gay, as well as other estates, but said that a deal was by no means certain. Two advisers helping her with the purchase said she was in a strong financial position. As one of Durand's five children, she inherited stock in the privately held family glass and crystal company, which reported an annual turnover of $1 billion last year. A couple of years ago, she sold her shares and left the company, which has been renamed Arc International Group.
Péré-Vergé, 63, is no newcomer to Pomerol, where she owns 47 acres of vineyards between two estates, Château Montviel, which she bought 12 years ago, and Château La Croix des Templiers.
"She is close to the region," said Alain Raynaud, 54, whose family owns Château La Croix-de-Gay nearby and who also made a bid for Le Gay. "She doesn't come in a Ferrari but travels around the vineyards on a mountain bike. She bikes around checking on the grapes. She knows Pomerol as well as anybody here."
Péré-Vergé is also involved in a project in Argentina with Bordeaux enologist Michel Rolland and other investors, but she likes to be hands-on and close to the vineyards and winemaking.
"She has an immoderate taste for terroir," said Franck Lagorce, a Bordeaux realtor involved in the Le Gay sale.
The decision to save Lafleur at the expense of Le Gay reflects a judicious move by its owners to retain the better of the two estates. While Le Gay lies near well-known Pomerol estates, its vineyard is planted on a slope with a less-favorable northern exposure; part of the vineyard slopes down to the Barbanne river, away from the appellation's best terroir, the celebrated gravelly knoll known as the plateau de Pomerol, which is home to châteaus Pétrus, La Fleur-Pétrus, Lafleur, Le Pin and Vieux-Château-Certan.
Le Gay sold its best vineyard land to the Moueix family's Château La Fleur-Pétrus in 1994, the year when the ailing Marie Robin was placed under guardianship. What is left is 37 acres of land -- 22 acres of fields, buildings and gardens and 15 acres of vineyards, some on very good terroir and some planted on lesser soils.
Bordeaux vintners said Péré-Vergé is overpaying for Le Gay if her offered price is indeed almost $25 million, which she and Guinaudeau declined to confirm, citing a confidentiality agreement.
"It's absolutely too expensive, and it makes no sense. You can never get a return on investment with such prices," said Bordeaux vintner Christian Moueix, who had made a lower offer for Le Gay. He made the wine at Le Gay for several years, but that arrangement will come to an end once a new owner takes over, he said.
Moueix, whose family owns or co-owns several wineries in the area, such as Pétrus and Trotanoy, predicted that the sluggish global wine market would force wineries to adjust their profitability projections, and high purchase prices will be detrimental to their economic health. The current economic downturn has already affected one big deal in Pomerol this year: Right Bank vintner Gérard Perse announced recently that he is postponing the purchase of Château Petit-Village from AXA Millésimes after agreeing to pay $44 million for the estate.
The reported sales price for Le Gay translates to more than $1.6 million per planted acre. But Guinaudeau argues that the real cost of Le Gay should take into account a house, a 1.2-acre park complete with a pond, and a rustic but functional winery. Plus, Le Gay is expected to plant an additional 10 acres of appellation d'origine contrôlée Pomerol vineyards, boosting the château's vineyards to 25 acres. Viewed from this angle, the offer would work out to less than $1 million per acre.
The exact cost of Le Gay's vineyards is a hot issue in Pomerol, for the same reasons that Guinaudeau and his relatives got squeezed after Robin's death: estate taxes. In France, estate taxes are set in relation to the value of the individual property, whose value in turn is set on the basis of real-estate transactions in the appellation. Pomerol winemakers fear that inflated vineyard prices could lead to higher estate valuations and crushing estate taxes that would hurt the long-term stability of the appellation's family-owned wineries.
"I am depressed. These prices threaten families that have to manage estate successions," said Alexandre Thienpont, winemaker of famed Pomerol estate Vieux-Château-Certan. He estimated it would take Péré-Vergé 25 years to make a return on her investment. Thienpont, who co-owns VCC with 39 other members of the Thienpont clan, added, "If 10 members of my associates want to sell their parts, I don't have the money to buy them out at these prices."
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