Chairman's deal spites Lion

By DITA DE BONI liquor writer

Allied Domecq has used a Russian connection to wend its way to the 10 per cent level on Montana's share register.

The company, which managed to take just under 6 per cent of Montana at a price of $4.55 on Monday, bought a chunk of Montana chairman Peter Masfen's holding in the winemaker between the close of trade on Monday and yesterday's opening bell.



The liquor firm paid him $4.80 a share for 7.2 million shares, in a deal worth more than $34.5 million.

Mr Masfen is in Moscow attending an Apec meeting. He will also visit St Petersburg before returning to New Zealand at the end of this month, and was unavailable for comment last night.

Masfen Holdings' once-strategic 19.95 per cent stake has been whittled down to 16.29 per cent by the deal.

Allied Domecq spokeswoman Jane Mussared said last night the deal was struck when the liquor concern's local broker, UBS Warburg, telephoned Mr Masfen in Moscow and proposed the sale to take Allied to its target of 10 per cent.

She said there was no ongoing dialogue between the two parties and she didn't know if another sale would happen.

The move is uncharacteristic of Mr Masfen's actions to date in the tussle between Allied and Lion.

He and Montana's independent directors advised shareholders not to accept Lion's approaches some months ago, saying the brewer's partial offer was not fair to all shareholders.

Some analysts saw Mr Masfen's latest move as a reversal because he had accepted a substantial premium for his shares at a time when small shareholders were having to wait for Lion's latest offer to open.

But one said small shareholders did have options: "They've been offered Allied's $4.55 and that has been open to everyone. Masfen has a premium stake and he would naturally get a premium."

Montana shares closed down 5c at $4.70 yesterday.

Meanwhile, Lion Nathan will also cool its heels, saying last night that it will acquire an additional 5 per cent of Montana on the market tomorrow, instead of today.

The delay is thought to be due to Lion erring on the side of safety, as it is technically required to wait two days after changing its bid price before it can start buying.

Lion has said it will pay between $4.65 and $5.05, up from the $3.95 to $4.70 band it filed last month.

Lion's chief financial officer, Paul Lockey, says the brewer is keen to begin buying and is confident it will acquire another 5 per cent of Montana.

"With an average entry price of $3.40, we have the capacity and resolve to protect our existing investment against this unwelcome interest from Allied Domecq, by acquiring further shares on Thursday."