Stalker tracks Lion's wine bid

By SIMON HENDERY and AGENCIES

Brewer Lion Nathan may have walked into another takeover tussle with British liquor giant Allied Domecq - this time over control of Australian winemaker Petaluma.

Lion announced a $A7 a share takeover bid for the up-market South Australian winemaker on Tuesday, valuing the company at $A222 million.

But speculation is growing that Allied, which this year snatched New Zealand's largest winemaker, Montana, from Lion's clutches, may also be bidding for Petaluma.

Market sources say broking house Goldman Sachs, which represented Allied during the battle for Montana, is offering more than Lion for Petaluma shares.

Melbourne's Age newspaper yesterday quoted an industry source as saying Goldman Sachs had a "mandate" to disrupt Lion Nathan's bids for Petaluma and its other Australian target, Banksia Wines.

"They are chasing 10 per cent of both companies and that would give them a blocking stake," the Age source said.

Petaluma shares were trading at $A7.15 on the Australian Stock Exchange yesterday afternoon and Banksia was trading at $A1.20, A4.8c above Lion's offer price.

Lion spokesman Warwick Bryan confirmed Goldman Sachs had been buying shares in both companies.

"They are both good assets, so there is always a possibility that someone else might be interested. When you do a takeover there is always a risk that someone will take the same view as you that it is an outstanding asset."

Lion Nathan bailed out of the bitter $1 billion takeover battle for Montana in August and has since sought opportunities across the Tasman to prop up its beer business with premium wine.

Last month, it made a $A68 million friendly takeover bid for Banksia.

Allied Domecq spokeswoman Jane Mussared said rumours the company was making a play for Petaluma were simply speculation.

"We do have acquisition targets in Australia but have said this openly for a good year or so now," she said.

Lion shares closed unchanged yesterday at $5.68, after losing 27c on Tuesday amid analyst concerns the company was prepared to pay too much for its Australian wine assets.

But Lion chief executive Gordon Cairns said the Petaluma price was justified because of the "icon" status of the company's up-market labels.