Lion Nathan ordered to sell 19pc of Montana

11.15 am

Lion Nathan has been ordered by a Stock Exchange committee to sell 19 per cent of the winemaker.

The Montana standing committee, comprising retired High Court judge Sir Ian Barker, retired Court of Appeal judge Sir Duncan McMullin and Bill Wilson, QC, ruled earlier this month that the Australasian brewer had breached listing rules by buying a 10 per cent stake of Montana shares on February 8 in violation of a takeover waiting period.

Charged with resolving whether Lion Nathan should forfeit part or all of its 62 per cent stake in the winemaker as punishment, the committee today released its decision that the brewer was "required to sell that part of its holding that represents 19 per cent of the shares in Montana".

It ruled that all of Lion Nathan's securities in Montana were "defaulter's securities".

Lion Nathan has one month to complete the sale of the shares, which must be to a party or parties independent of the brewer.

The standing committee said it was essential that there be no contract, arrangement or understanding in place

by which Lion Nathan has any form of continuing entitlement to or interest in the shares sold.

"However, provided it does not have any such contract, arrangement or understanding in place at the time of transfer, Lion Nathan is free at any subsequent time to purchase Montana shares from any transferree of shares which are sold pursuant to this Ruling," the committee said.

The reduction of Lion's holding in Montana to 43 per cent will re-open the battle for control of New Zealand's largest wine-producing company.

British drinks company Allied Domecq, which holds 27 per cent, wants full control of Montana.

Allied, which initially brought the complaint against Lion’s February share purchase, had asked the committee to force Lion to sell all its holding in Montana.

Lion Nathan argued that only 9.9 per cent of Montana shares were caught in what it said was a "technical breach" of listing rules.

Full text:

Montana Standing Committee Decision