Lion's Montana selldown found wanting

By Phil Boeyen, ShareChat Business News Editor

Monday 16th July 2001

Allied Domecq has won another round in the fight for Montana, although the battle is far from over.

In its latest decision the Montana Standing Committee has found fault with the context in which Lion is proposing to sell 19% of the shares it holds in the winemaker.

The brewer must sell the stake after being found in default for breaching NZSE regulations when it bought a block of Montana shares in February.

Although it was planning to begin the sale, Lion had concurrently offered to buy all rest of Montana in two blocks - firstly offering $5.50 per share to take it above 50% and then offering $3.70 a share to mop up the company.

In the latest wrangle Allied claimed that the sale of the 19% holding is inextricably linked with the new takeover offer.

The committee has agreed that the context of the selldown does not comply with a listing rule that states that the holding must be transferred to a person who is not a defaulter.

The committee also says it does not comply with the committee's decision that any sale can go ahead "provided it does not do so pursuant to any form of contract, arrangement or understanding in place at the time of transfer."

No reasons have yet been given for the decisions, although a written decision will be delivered at a later date.

Allied spokeswoman Jane Mussared says the latest decision is very pleasing, but also expected.

"It is what we would have expected otherwise we would not have taken the action," she says.

Ms Mussared said she was unable to comment on the matter further until the written decisions have been released.

Lion has not released any details of its share selldown, deeming the information commercially sensitive.

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