Allied in bid for 10pc of Montana

By DITA DE BONI liquor writer

Allied Domecq will stand in the market for Montana shares at the opening bell this morning, securing a toehold in the company it aims to snatch from brewer Lion Nathan.

It is understood Allied's bid will be priced at $4.55 a share, with the UK company aiming for 10 per cent of Montana in today's swoop.

The holding will allow Allied to have a strategic block in the company, which could eventually stymie a compulsory acquisition of the company by Lion if the latter acquires a bigger stakeholding.

The price is at the upper end of Allied's proposed bid of between $4.16 and $4.64 a share.

Montana shares closed unchanged last night at $4.25.

Allied launches its attack on Montana's share registry in the very first hours allowed by its restricted transfer notice, filed three weeks ago.

Its pitch for 10 per cent of Montana also comes just hours after Lion Nathan's revised offer for up to 100 per cent in Montana was deemed mostly fair by independent appraisers PricewaterhouseCoopers.

Lion will stand in the market for 49 per cent of Montana on May 16 at a range of between $3.95 and $4.70 a share. PWC, in its independent appraisal of that bid, has said Montana shares are worth between $4.24 and $4.72 - the upper end of Lion's bid range.

At present, Lion Nathan owns 51 per cent and Montana chairman Peter Masfen owns 20 per cent of the wine company. Allied already holds 60,000 shares, equalling around 0.02 per cent.

According to market analysts spoken to by the Business Herald, Allied is attempting to hedge its bets pending the outcome of a standing committee's hearing into whether a portion of shares purchased by Lion Nathan in Montana was legal.

A source close to Allied said that the company was "quietly confident" that the hearing would find in its favour - suggesting that either Lion Nathan or its broker, Credit Suisse First Boston, is likely to be found to have lined up sellers of Montana shares earlier than stock exchange rules allowed.

If found to have breached the rules, Lion Nathan would have 30 days to find a buyer for its shares - a party not aligned to Lion, according to the rules.

Lion Nathan has vowed to fight any such ruling.