Watchdog eyes disputed stake

By FRAN O'SULLIVAN assistant editor

The New Zealand Stock Exchange's market surveillance panel will today assess whether it should step in and resolve the fate of Lion Nathan's disputed stake in the Montana Group.

At the panel's request, Montana's independent directors - led by deputy chairman Barry Neville-White - yesterday postponed an expected statement which was to spell out their next steps for resolving the contested issue.

Panel secretary Philippe Leloir confirmed that "discussions were taking place between the panel and various parties."

Asked if either Lion Nathan or Montana's independent directors had requested the panel's intervention, Mr Leloir replied: "No comment."

Under Stock Exchange listing rules the panel can step in and forge a quick commercial resolution to the dispute, which is stalling the takeover battle for Montana being waged between Lion Nathan and Britain's Allied Domecq.

But for the panel to move ahead with authority, all the affected players would need to come to the party.

Last week, an exchange-appointed standing committee ruled the Australasian brewer had breached listing rules by buying a 10 per cent stake of Montana shares on February 8 in violation of a takeover waiting period.

Montana's independent directors were charged with resolving whether Lion Nathan should forfeit part or all of its 62 per cent stake in punishment.

The standing committee said the directors could bring the issue back to them if they failed to reach agreement.

In the hot seat today is a market surveillance panel division consisting of experienced Auckland company directors Bill Falconer and Alison Paterson, and newcomer Tim McGuinness.

The division had earlier delegated its authority to the standing committee consisting of three Montana nominees: Sir Duncan McMullin, Sir Ian Barker and Bill Wilson, QC.

Mr Neville-White confirmed last night that the independent directors had not decided on the size of Lion's penalty by the time the surveillance panel asked them to postpone their statement.

The directors would simply have detailed the progress of their deliberations in respect of the defaulter securities ruling.

Neither Lion Nathan chief executive Gordon Cairns nor Allied Domecq director of corporate affairs Jane Mussared had anything to say on the panel's request.

But the panel division will inevitably canvass both their views, with those of Montana's independent directors and the standing committee.

It was unclear how long this would take, but the Montana independent directors said yesterday that they hoped to make a comment "as soon as possible."

* By market close yesterday, Lion Nathan shares were up 5c at $5.10 and Montana shares were flat at $4.80.