Lion growls at share sale

By FRAN O'SULLIVAN assistant editor

Lion Nathan has issued a "please explain" to Montana Group chairman Peter Masfen over share sales in New Zealand's premier wine company, which it claims have not been appropriately recorded.

The Australasian brewer has also flagged the issue with the New Zealand Securities Commission as the hostile takeover battle for control of Montana escalates.

Lion wants to know why a substantial security holder notice issued by Masfen Holdings on Tuesday, May 15, which recorded Mr Masfen's sale of 7.2 million Montana shares to British drinks firm Allied Domecq, did not record that 650,000 shares had changed hands the previous Friday.

Lion Nathan chief executive Gordon Cairns, whose company is Montana's major shareholder, said the substantial security holder notice recorded only that Masfen Holdings had sold the 7.2 million stake, not that Mr Masfen had started selling down to Allied four days earlier.

Mr Cairns said the 650,000 share sale enabled Allied to gain momentum in the marketplace as it built a 10 per cent stake over the five days.

"At no stage did Mr Masfen approach us to sell his shares on May 11 or 12, nor did he tell us on May 11 that he had sold his shares," said Mr Cairns.

Speaking from Berlin, Mr Masfen dismissed the Lion claims as mischievous.

He confirmed that the 650,000-share parcel had been sold to Allied.

But he said the filing of the notices had been left to "responsible people in Auckland."

"Lion has been seeking to gain control of Montana by stealth under the existing takeover regime," Mr Masfen said.

He said the tactics he and the other independent Montana directors had used during the takeover battle had boosted the share price in the interests of all shareholders.

But Mr Cairns said Mr Masfen's position as Montana chairman was now compromised and he "should do the honourable thing as soon as possible."

Under Stock Exchange rules, Mr Masfen was not obliged immediately to disclose his May 11 sale of 650,000 shares, as it was under the one per cent disclosure threshold.

But Lion Nathan is adamant it should have been contained in the May 15 notice.

The Lion Nathan request was made in a letter sent by law firm Russell McVeagh to Montana's company secretary, John Nuthall, last Friday after Allied's announcement that it had acquired most of Mr Masfen's remaining 16.29 per cent stake.

"The fact that a company controlled by the chairman of directors of Montana chose to sell 650,000 shares on that day at a price of $4.55 a share is a matter of importance to Montana shareholders," it said.

Lion Nathan reports its interim results for the six months to March 31 in Sydney today.

Market estimates are that it will report a net profit of $A80 million ($98.15 million) to $A85 million for the period.