Montana holds fire on Lion penalty

By DITA DE BONI liquor writer

Now the legal guns of warring parties are cocked, the independent directors of Montana have declared they need more time to consider the issues surrounding Lion's defaulter securities.

After a five-hour meeting in Auckland yesterday, the directors said they would seek advice to help them decide how Lion should be punished for breaching the listing rules.

Another meeting has been scheduled for next week.

The directors are debating how much of Lion's 62 per cent shareholding should be stripped from the brewer after it was found to have bought shares before being legally allowed to on the night of February 8.

The directors can strip part, or all, of the 62 per cent under listing rules, and have the option of referring the matter back to the Standing Committee of QCs set up by the Stock Exchange's Market Surveillance Panel.

"We will take such time as required to give the issues dealt with in the report full and proper consideration," said the deputy chairman, Barry Neville-White.

Allied Domecq and Lion Nathan are believed to be settling in for a protracted fight and continue to bring in observers from overseas.

Lion Nathan chose not to comment yesterday but a source close to the company said it was being "like a duck - calm on top and paddling frantically underneath."

The source also said the brewer was preparing something that would keep the dispute going for a while longer, but would not elaborate.

Allied Domecq's Jane Mussared returned from Europe last night saying the company was "happy and relaxed" about the directors taking their time over a penalty for Lion.

But Allied's adviser, Sydney-based Malcolm Turnbull, the aggressive and high-profile managing director of Goldman Sachs, may also be arriving shortly, suggesting the UK liquor giant is bracing for a long legal dispute.

Australian and UK analysts have suggested Allied is continuing to fight for Montana to save face after a string of less-than-successful takeover bids, but Ms Mussared dismissed that as rubbish, saying it was still interested in 100 per cent of Montana and its challenge of Lion's actions was not sour grapes.

Montana shares closed down 6c at $4.80. Lion Nathan stock gained 10c to $5.