Allied seeks Oz acquisition

Drinks giant Allied Domecq will this week begin takeover talks with Australian wine producer Peter Lehmann Wines.

The UK company is the largest investor in Peter Lehmann, which earlier this month agreed to be bought by its Swiss rival Hess for A$133m (£55m).

However, Allied Domecq, which has a 14.5 per cent stake, responded to the news by saying it might be interested in acquiring the company. It is understood that talks between the two will start in earnest this week.

Allied Domecq refused to discuss a possible takeover.

The deal would be a pivotal move for the FTSE 100 company. It owns a range of premium spirit brands such as Beefeater gin and Malibu but remains in the shadow of larger rival Diageo, owner of Smirnoff vodka.

Over the past few years it has therefore concentrated on building up an impressive wine business, which now includes the Perrier Jouet and Mumm champagne brands and New Zealand's Montana wine.

But it has so far failed to secure a footprint in Australia and is known to be keen to do a deal in the country.

However, it is understood that founder Peter Lehmann has already told shareholders that one of the reasons he is backing the bid by Hess, which is a family-run business, is to prevent Allied Domecq gaining full control.