Montana rivals lock horns again on listing rules

By DITA DE BONI liquor writer

Legal skirmishing between Allied Domecq and Lion Nathan, rivals for control of the Montana Group, escalated yesterday as Allied accused Lion of again breaching listing rules.

Allied says Lion's plan to sell 19 per cent of Montana - as it must as punishment for illegally buying the shares in February - while it seeks to boost its stake in the winemaker with a two-tiered offer, falls foul of a stock exchange committee's ruling.

Lion must sell the 19 per cent stake to an unrelated party within 30 days, or risk having the Montana Group sell the shares.

The question of whether Lion Nathan can, meanwhile, buy the 7 per cent it needs to gain control of the company, and any extra stock, will be considered soon by the exchange's market surveillance panel. The case could then be referred to the panel's standing committee.

The issue of whether the party, or parties, buying Lion's defaulting securities would then feel obliged to sell the shares back to Lion to take advantage of the scaled $5.50 a share offer is also understood to be a basis for Allied's compliant.

Lion Nathan spokesman Warwick Bryan said yesterday the brewer was confident its plan would comply with stock exchange rules and the requirement of the standing committee. "We understand the rules very clearly," he said.

The company had not decided how it would sell the 19 per cent but there would be no strings attached to the buyer and no "wink-wink" deals.

Allied spokeswoman Jane Mussared yesterday denied that the British-based liquor firm's latest charge was tit-for-tat.

"The short answer is no, [it's not]. We believe we have a strong legal case here. We've been looking at the issue for a number of days and it's a considered, thoughtful action."

Meanwhile, Allied has been barred from boosting its 27 per cent stake this week as its "irrevocable promise" made to shareholders last week to buy all shares in the company for $4.80 was considered in breach by the takeovers panel last Sunday.

The panel will again consider Allied's alleged breach today, the same day Montana holds a board meeting in Auckland.

While Allied's stock-buying programme is on hold, both Allied and Lion have started a code-compliant formal offer process.

Lion Nathan's one is to buy 11 per cent of Montana at $5.50 a share, and the remainder at $3.70 each. Allied's offer is to buy 100 per cent of the company at $4.80.

Lion Nathan yesterday confirmed its plan was to gain control of Montana. Selling its holding to Allied was only one of many options it would consider if the price was right, and "$4.80 is not the right price."

Allied head Philip Bowman has quashed the idea that Allied would be keen to work on a joint venture deal, saying "[Lion] brings nothing to the table."