Montana slides as Lion mops up

Winemaker Montana dominated the New Zealand sharemarket yesterday as Lion Nathan moved to sweep up the remaining 4.27 per cent required to gain a controlling stake in the company.

The lid was taken off Montana shares yesterday after trade was halted on Friday to allow the market time to digest competing bids between Lion and British liquor giant Allied Domecq.

As expected, investors lined up in droves to take advantage of Lion's partial offer of $4.65 a share, which trumped a $4.40 full bid by Allied.

With only formalities standing in the way of Lion declaring its partial takeover a done deal, Montana closed down $1.05c at $3.62 - roughly the level it was trading at before the bidding war began.

"Clearly people have just taken the takeover premium off the price this afternoon," said Nigel Scott, ABN Amro head of institutional dealing.

On Friday, Lion Nathan gained the upper hand by effectively sidestepping a trading barrier on Montana shares, using the recess to bump its stake to 46.46 per cent from 28 per cent in offmarket deals with institutions.

Yesterday, 16.76 million Montana shares valued at $77.92 million had changed hands by the market's close.

Mr Scott said small investors would be told today whether their offers had been transacted, and Lion was expected to announce it had gained the controlling stake.

Lion Nathan closed down 15c at $4.65.

Aside from the Montana story, it was a fairly typical quiet Monday with light turnover in most stocks traded, although the broader market did manage to close a little stronger.