Allied Domecq snapped up almost 6 per cent of Montana yesterday as it renewed its bid for control of the country's largest winemaker. It would have bought more, but the British liquor giant was gazumped in the market by a mystery buyer.
While Allied was offering $4.55a share, broker Credit Suisse First Boston entered the market at a higher price.
Acting on behalf of unknown customers, CSFB began buying at $4.56 a share and moved as high as $4.60, ending the day having bought about 0.5 per cent of Montana shares.
Allied's rival in the struggle for control of Montana, Australasian brewer Lion Nathan - which holds a 51 per cent stake - was forced to watch from the sidelines, unable to re-enter the market until a notice period expires on Wednesday.
JP Morgan broker Arthur Lim said there were two schools of thought. One involves CSFB acting on behalf of arbitrage players or hedge funds. The other features the broker buying shares on behalf of a Lion-friendly party. CSFB is Lion Nathan's broker.
"If you look at the numbers, Peter Masfen [Montana chairman and Allied supporter] and associates are estimated to have about 25 per cent of Montana and now Allied has about 6 per cent," said Mr Lim.
"So between the two of them they now have about 31 per cent under control. The thoughts are that if Lion Nathan is forced to divest the 22 per cent that it bought, it will bring Lion to 29 per cent, which means that that 31 per cent is already in excess," he said.
Lion is being investigated by the Stock Exchange's market surveillance panel for the way it acquired a 22 per cent share in Montana this year, taking its total stake to 51 per cent. If found to have breached exchange rules, it could be forced to divest some, or all, of its holding.
If the finding is against Lion and it is made to sell the 22 per cent stake, it will not be allowed to sell it to a friendly party or associate.
