Allied Domecq, the UK drinks group, yesterday received what may be a winning spur in its NZ$1bn (£286m) takeover contest for Montana after independent directors of the New Zealand wine group advised shareholders to accept Allied's offer.
Allied, which is battling for control of Montana with Lion Nathan of Australia, has made a NZ$4.80-per-share bid for the 72 per cent of Montana that it does not already own.
Montana's directors called this offer "full and fair" following an independent report that valued Montana shares at NZ$4.28 to NZ$4.72. But they recommended that shareholders wait to see if Lion makes a fresh bid. Lion was ordered to reduce its 63 per cent stake in Montana to 44 per cent by the New Zealand stock exchange for breaching exchange rules.
An Allied spokeswoman said the directors' endorsement was "a very positive step", adding that Allied's bid was the only one on the table.
Lion has appealed to the New Zealand High Court to review the ruling to sell its 19 per cent stake and a hearing is set for Friday. Lion has until 17 August to sell the shares on the open market, after which ownership will revert to Montana.
Alan Gray, an analyst at ING Barings, said Allied deserved credit for its commitment. He said: "But the outcome could still be messy. I'd be surprised if they get it all right away."
Most of the 11 per cent of Montana not owned by the two bidders is held by uncontactable shareholders or in passive funds. Montana reported a lower-than-expected net profit of NZ$25.8m for the full-year to 30 June.
Allied turned its attention to the New Zealand wine group after it withdrew from the race to swallow Seagram's drinks portfolio last year. It has recently bought wineries in California and Argentina. Its shares rose 6.25p to 404.75p.Reuse content