Allied Domecq yesterday entered the battle for Peter Lehmann Wines, one of Australia's most famous wine makers, trumping a bid from the Swiss-based group Hess. Allied has bid an initial A$3.85 (£1.60) for each Peter Lehmann share but has said it is willing to raise its offer to A$4 per share if it secures at least 90 per cent of the wine producer. This would value Peter Lehmann, based in South Australia's Barossa Valley region, at A$149.2m.
Allied is already the group's biggest shareholder, with 14.5 per cent of the company. Next comes the Lehmann family with 10 per cent. There has been some comment in the Australia press regarding concerns at Peter Lehmann that a deal with Allied could harm the group's "family values" way of doing business. Allied Domecq played down such concerns yesterday, stressing that Peter Lehmann would join "a confederation of wine businesses and would continue to operate with significant local autonomy".
If Allied's bid is successful, the Australian wine group, founded byPeter Lehmann, who is now 73, will join a portfolio of 13 wineries across the so called new world wine growing regions. Over the past three years Allied has spent more than £1bn building its wine portfolio and is now the world's fifth biggest producer, controlling Montana Group, New Zealand's largest wine maker, and Spain's Bodegas y Bebidas.
The group has traditionally been associated with spirits and liquor brands such as Ballantines whisky and Beefeater gin but like most other spirits producers has found that the market is now mature. Wine, however, is viewed as a growth business, with consumption rising much more rapidly than spirits, and currently accounts for about 15 per cent of Allied's operating profit.
Nigel Popham, an analyst at broker Teather & Greenwood, gave the group's bid for Peter Lehmann the thumbs up. "It makes strategic sense as it adds an Australian wine to the group's portfolio, something the company previously lacked," he said.Reuse content