Takeover fever uncorked as Californian vineyard plans shareholder shake-up

A radical overhaul of the share structure at Robert Mondavi, the prestigious California wine business, is expected to kick-start a battle for control by some of the world's biggest drinks companies.

The wine maker is planning to reduce the Mondavi family's voting control from 85 to just 40 per cent. Shares in the group soared on the news, as Wall Street predicted that Mondavi would either be split up or would hoist a "for sale" sign over the entire business.

Founded in 1966 by Robert Mondavi, the company is known for its premium brands, which sell for up to $125 (£70) a bottle in the US and are distributed in 90 countries. It was one of the first wineries to establish California's reputation as a leading producer.

Potential suitors are thought to include Diageo and Allied Domecq. Pernod Ricard of France, which owns Jacob's Creek, and Constellation Brands, the US giant, may also be in the running. Mondavi has a market value of $679m but could sell for considerably more because of the strength of its brand.

Allied Domecq has built up its wine business over the past few years and now owns brands such as Mumm, Montana and Clos du Bois. Its portfolio stretches across New Zealand, France and California, among other countries, although it has failed to secure a producer in Australia.

Sources close to Allied Domecq and Diageo played down suggestions that either would bid for Mondavi but conceded they would be looking at the business.

However, one drinks analyst said: "Allied Domecq would like to buy in Australia but the problem with these things is that companies put forward strategies and then something comes in left of field." He added that Diageo, which owns the Blossom Hill label, would also be interested "as long as it's a sensible valuation".

The potential sale comes during a period of consolidation for the drinks industry, with family-controlled whisky distiller Glenmorangie putting itself up for sale only last week.

The Mondavi family has a long history of not getting on. When Cesare Mondavi died in 1959, he left his wine business to his two sons, Robert and Peter, but Robert was voted out and the brothers did not speak for 20 years.

Robert went on to set up the rival wine maker Robert Mondavi, later suing the family and winning part of the original vineyard. His sons, Tim and Michael, were joint chief executives during the 1990s, but they also had a difficult relationship. Both men are now vice-chairmen, with Gregory Evans brought in as chief executive in 2000.