Allied queries Montana share rise

By Phil Boeyen, ShareChat Business News Editor

Wednesday 15th August 2001

Liquor giant Allied Domecq is once again expressing concern at Lion Nathan's (NZSE: LNN) selldown of its default stake in winemaker Montana (NZSE: MON).

On Monday Lion lost a legal attempt to have the Montana Standing Committee decisions reviewed, leaving it in a position where it had to begin selling off 19% of its holding, as ordered.

The selldown is a penalty for breaching NZSE listing rules during a buying splurge earlier this year.

Media reports today suggest Lion has begun selling off the penalty stake, with Montana shares rising in price.

Allied Domecq says the market response to the selldown process suggests that there is an arrangement or understanding between Lion Nathan and the buyers of the defaulted securities about the price at which Lion Nathan will buy those shares back.

"Allied Domecq is very concerned that such an arrangement or understanding would be in breach of the listing rules and the third Standing Committee decision," the company says.

"Allied Domecq is taking advice on the implications of the selldown process."

Allied Domecq has a takeover offer in the market at $4.80 per share.

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