Allied quick to counter Lion's takeover allegations

By FRAN O'SULLIVAN

British liquor group Allied Domecq plans to quickly "expose its processes" to counter allegations by rival Lion Nathan that it, too, is in default of the takeover rules.

Allied Domecq says it will not indulge in the "delaying tactics" Lion Nathan and its broker Credit Suisse First Boston employed when asked to answer allegations of share trading in violation of a takeover pause period.

Lion Nathan has alleged that Allied Domecq breached takeover rules when it bought shares from Montana chairman Peter Masfen last month, enabling the British company to boost its stake to 26 per cent. It has also taken issue with the role broker JB Were played during the early stages of the lengthy Montana takeover saga.



Allied Domecq has been preparing its evidence since learning this month that Lion Nathan had complained to the Stock Exchange.

The exchange's market-surveillance panel sat on the Lion allegation for two weeks. It then referred the complaint to a standing committee comprising three Queen's Counsel - Sir Duncan McMullin, Sir Ian Barker and Bill Wilson - which it had also asked to rule on the consequences of Lion's lining up share deals ahead of the approved time.

Brokers have criticised the committee's analysis of listing rules relating to share transfers during takeovers, saying the committee ignored previous panel rulings.

Lion Nathan will now use against Allied the interpretation which the standing committee applied to share transfers. Panel leader Bill Falconer said it was important the two allegations were dealt with consistently.

Mr Masfen has declined to comment on the Lion Nathan allegations. But he earlier described as "mischievous" claims by Lion chief executive Gordon Cairns that a pattern of share sales showed the Montana chairman was favouring Allied in the takeover stoush.

Montana's independent directors, led by deputy chairman Barry Neville-White, had already started deliberations over the process for settling Lion Nathan's default when the surveillance panel took the matter off their hands on Friday.

The lengthy Montana battle is quickly running up against the July 1 deadline for the implementation of the new takeover regime.

Lion Nathan, the first listed company to be ruled a defaulter, also risks pioneering a comeback for Montana shares under the new regime if it is forced to sell part of its stake.