Allied in the hunt again for Montana

By DITA DE BONI liquor writer

Allied Domecq has renewed its attack on Montana Wines' share registry as Lion Nathan's majority ownership of the winemaker hangs in the balance.

Yesterday, Millstream Equities, a subsidiary of British-based Allied Domecq, indicated that it was still interested in Montana by notifying the Stock Exchange that it would stand in the market again.

The offer is between $4.16 and $4.64 a share, and will be made in two weeks after the notice-and-pause period lapses. The offer will be on the table until July 1.

The proposed band matches the estimate by independent valuers Pricewaterhouse-Coopers of a "fair-value" range for Montana late last year.

Allied's first bid was pitched in the middle of that range at $4.40 a share. Montana shares closed up 2c last night at $4.17.

Allied spokeswoman Jane Mussared said last night that yesterday's notice was essentially a formality, reiterating Allied's interest in the Montana business.

She denied that a deal had been struck with Montana chairman Peter Masfen to buy his 21 per cent chunk of the company.

"It's an attempt for us to get ahead of the ball game - it's the same offer," said Ms Mussared.

"Should - and I stress should - [Lion's] shares become available, we would need to reconsider at the time anything that has changed within the [Montana] business and could adjust our offer up or down, but we're saying it is likely to be a similar amount."

Ms Mussared - who flew here to keep a watch on proceedings between Lion Nathan and the Stock Exchange surveillance panel when they began - will fly back to New Zealand early next month.

Meanwhile, the investigation into Lion Nathan's allegedly premature takeover in February of up to 51 per cent of Montana continues, with a hearing set for May 5 to 6.

Under Stock Exchange rules, Lion Nathan could be forced to relinquish its total shareholding in Montana if it is found to have jumped the gun in lining up sellers before it was allowed under a waiver granted by the exchange.

Another possibility is that Lion could distance itself from the actions of its broker, Credit Suisse First Boston, if the brokerage house is found to have acted independently of Lion in lining up sellers.

The broker this week handed over tapes and transcripts of conversations between institutional shareholders and dealers to the committee investigating Lion's speedy absorption of outstanding shares.

Either way, there is no guarantee that Allied will be able to buy outstanding shares in Montana, even if the Lion Nathan stake in Montana is eventually declared "defaulter securities."

The brewer has already hinted that it would appeal against any such ruling, with the case capable of going as high as the Privy Council.

Lion would have 30 days to sell its stake if forced to relinquish it.

The brewer can choose any buyer to sell to, at any price.

Other companies interested in a chunk of Montana would have to declare their interest by making a stand in the market.

Only after 30 days, if Lion Nathan has not made a sale, is Montana free to sell shares to its preferred buyer.

Montana has already indicated that it wants to sell to Allied Domecq, which is eager to own all of the company.