Masfen loses $4m an hour

Friday 16th February 2001

I DON'T LIKE MONDAYS: Peter Masfen ponders while Montana's share price burns

Wine trail-blazer counts the personal cost of Lion Nathan's waiver win

By Nick Stride

Peter Masfen had a bad day at the office on Monday - he lost $4 million an hour.

The Montana saga saw the value of his holdings in the winery crash by $33 million in a single day.

That was the extent of the initial damage to the value of his 20% Montana stake as the market slashed the shares in response to Lion Nathan's seizing control.

Mr Masfen had already said he would accept a $4.40 bid from Allied Domecq for all the shares in Montana, an offer that would have netted him $189 million and propelled him into the top 10 of the country's richest individuals in last year's Rich List.

With the share price down to $3.62 on Monday the value of his stake had shrunk to $156 million. The shares have since recovered to around $3.89.

Mr Masfen, 59, will battle on as Montana's chairman. Lion Nathan chief executive Gordon Cairns told The National Business Review he would be delighted to serve with him on the Montana board.

Trained as an accountant, Mr Masfen pulled together the businesses of Corporate Investments Ltd and listed the company in 1985.

He weathered the 1987 sharemarket crash and the 1990 slump relatively well but CIL then made a disastrous decision to build an office block in Australia's Surfers Paradise. In 1992 CIL booked a $120 million loss and it had to sell assets to avert a receivership.

While Lion's victory looks irreversible, the game may not yet be over. Allied Domecq and its advisers are rumoured to be considering challenging the takeover.

Act New Zealand MP and securities law specialist Stephen Franks yesterday said talk about New Zealand being the "Wild West" was uninformed. The existing rules regulating takeovers were very powerful.

He cited last year's Richmond case, in which the meat company's directors were able to establish rival PPCS had breached rules in Richmond's constitution when it bought a 33% stake. They declared PPCS' shares "defaulter securities" and required PPCS to sell them.

"If what they [Allied Domecq] are saying is that there has been some sort of breach, then it's by no means all over," Mr Franks said.

Sharebrokers joined politicians, the Institute of Directors, and even the Stock Exchange itself in deploring a decision by the exchange's market surveillance panel to waive a rule requiring Lion to wait two days before buying Montana shares at $4.65.

"It's pathetic," one broker said. "That decision has caused a 75c destruction of minority shareholders' wealth. There's 49% of the company Lion hasn't got so that's around $80 million."

Full coverage:
Montana chairman to stay on but others will walk the plank
How JB Were dropped the Montana ball
Anatomy of a fiasco
Arts community fears Montana sponsorship programme hangover
Technically Speaking: Kirin played it by both the New Zealand and Japanese books
The O'Brien Column: Exchange now has PR advisers but it's hard to spot difference

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