Allied Domecq again cries foul

By DITA DE BONI liquor writer

Allied Domecq has once more attacked Lion Nathan for what it claims is a breach of Stock Exchange listing rules.

Lion yesterday completed the forced sale of 19 per cent of Montana Group for $4.65 a share, before the Friday deadline.

However, Allied raised the alarm at midday yesterday after noticing Montana's share price surge as much as 32 cents during the day.

The Bristol-based liquor company claims Montana stock - which hovered around the $4.65 range for most of the day - is so conveniently close to the price Lion sold its 19 per cent share parcel for that it hints at an arrangement or understanding between Lion and the buyers.

Allied spokeswoman Jane Mussared said it was "all a bit extraordinary", and there was some belief that there were "other plays afoot".

"Montana [shares] close at $4.35 [on Monday night] and then are suddenly trading around $4.65 each - and surprise, surprise, that's the same price Lion revealed it was wanting to sell at."

Ms Mussared said Allied was formally asking the Market Surveillance Panel to investigate.

Lion did not publicly announce the price at which it would sell the 19 per cent until around 3.30 pm, by which time the shares had already hit their day's high of $4.67. The brewer then announced it had sold 40.9 million Montana shares at $4.65 a share to 15 institutions. The tender process by which Lion sold the shares has been held by MacQuarie Equities in Australia in strict confidence. None of the buyers - understood to be Australian institutions - is believed to have bought more than 5 per cent of Montana in the sale, as they would have been required to declare their interest to the Stock Exchange.

Market commentators were yesterday surprised that Lion had been able to get such a high price for the shares. Most had thought the brewer would be so desperate to meet the Friday deadline that it would be screwed down on price.

Either way, involvement in Montana is a "no brainer" for fund managers who have been "immediately underwritten by the Allied Domecq offer of $4.80, which they can take at any time, and would still net them 15c for each share," said one analyst.

The Stock Exchange's market surveillance panel was last night understood to be assessing Allied's complaint.

Meanwhile, Simon Botherway, head of equities at Arcus Investments, said he expected Lion to make a pro-rata offer to all shareholders shortly.

One possibility is that Lion could offer to buy 11 per cent of Montana on a pro-rata basis at $5.50 a share - the first part of its scotched two-tier offer - and scrape through to control of the wine maker.

Lion cannot make another offer until after Friday, when the shares it sold yesterday must be paid for. It could conceivably indicate the general nature of a further offer on Monday, and send out offer documents 14 days after that.

Lion chief executive Gordon Cairns said yesterday that the brewer was on track to post after-tax earnings of around $A140 million for the year, up from last year's $A130.2 million.