Stock Exchange sets date for Montana inquiry

By ELLEN READ markets writer

A hearing to be held next month - probably in Auckland - will determine the fate of Lion Nathan's controlling stake in the country's largest winemaker, Montana.

The Stock Exchange market surveillance panel said yesterday that a hearing into the controversial takeover had been set down for April 2, 3 and 4. No further information on the process or timeframe was available.

Last month, Australasian brewer Lion Nathan gained a 51 per cent stake in Montana after trumping a full takeover bid by British liquor giant Allied Domecq.

The market surveillance panel agreed to investigate aspects of the takeover after a complaint from Montana on behalf of Allied Domecq, a minor shareholder.

Montana alleges that Lion began buying Montana shares before it was permitted under Stock Exchange rules.

Counsel for the parties involved - Allied Domecq, broker Credit Suisse First Boston, Lion Nathan and Montana - are scheduled to meet next week to settle on a procedure for the hearing.

Former Court of Appeal judge Sir Duncan McMullin, former High Court judge Sir Ian Parker and lawyer William M. Wilson will conduct the investigation.

Lion, whose $4.65 a share partial bid for Montana topped Allied's $4.40 a share bid for 100 per cent of the winemaker, has consistently denied it breached the rules.

Lion spokesman Warwick Bryan said this position had not changed but he was reluctant to discuss the case ahead of the hearing.

If found in breach, Lion could be made to divest some, or all, of its stake.

While the requirement for a full divestment is seen by some as unlikely, Allied's counsel believe a case last year may have some relevance as it involved the forced sale of an existing holding.

Last year the directors of meat company Richmond said rival meat processor PPCS had breached Richmond's constitution when it bought a one-third stake in Richmond's largest shareholder, HKM.

PPCS and HKM's combined 34 per cent shareholding was declared "defaulter's securities" and both were directed to sell their stakes.