Lion alone in Australian wine bidding

By SIMON HENDERY

Details of Lion Nathan's takeover offer for Australian winemaker Banksia Wines were posted to Banksia shareholders yesterday, a day after their board endorsed Lion's bid.

Despite speculation that Lion's old nemesis, Allied Domecq, is planning a counter-bid for the South Australian company, an offer from the British drinks giant has not surfaced since Lion made its $A74 million ($90 million) pitch three weeks ago.

Allied, the British drinks giant that this year trumped Lion in a battle for New Zealand winemaker Montana, recently picked up 15 per cent of Banksia. Lion already has just under 20 per cent.

Lion is offering $A1.12 a share (plus a A3.2c dividend), subject to its acquiring at least 50.1 per cent of the shares by November 19.

Banksia directors said on Monday that in the absence of any takeover activity, Banksia shares were likely to trade, in the near term, at prices below the Lion Nathan offer. Before the bid the shares had not traded above 96Ac.

The directors said they unanimously recommended that shareholders accept the Lion bid, in the absence of a higher offer, and that they were not aware whether Allied intended to make a counter-offer.

Lion, which is eager to get a foothold in the wine industry, has also made a $A222 million takeover offer for South Australian winemaker Petaluma.

Analysts say Allied's interest in Banksia threatens to stymie Lion's plans, and have also criticised the high price Lion is prepared to pay for Banksia and Petaluma.

Lion chief executive Gordon Cairns said: "Our strategy is to build an Australian-based global premium wine business and the acquisition of Banksia is an important step in fulfilling this strategy."

In the bidder's statement sent to shareholders, Lion says the $A74 million cost of buying all Banksia's shares would be covered by $A220 million in undrawn loan facilities the company has with the National Australia Bank.

Allied has been tight-lipped about its acquisition strategy in Australia, saying only that it does have takeover targets.

Last week, it said it had taken a stake in Banksia to protect its distribution agreements with Montana.