Allied Domecq to renew bid for NZ's Montana

Allied Domecq, the Beefeater gin to Ballentines whisky group, intends to renew its NZ$1bn (£286m) offer for Montana, the New Zealand wine group, to counter a fresh approach from a rival bidder, Lion Nathan of Australia.

The UK's second-biggest spirits company will repeat its offer of NZ$4.80 per share "in the next few days". Allied, which owns almost 28 per cent of Montana, was offered a second chance to win control of New Zealand's biggest winemaker after the country's stock exchange ordered Lion Nathan to reduce its 63 per cent stake in Montana to 44 per cent on Friday, for breaching exchange rules earlier this year.

But the Australasian brewer, which was given 30 days to sell that 19 per cent, yesterday continued its own push for Montana, announcing that it would offer NZ$5.50 a share to regain majority control and NZ$3.70 for the rest of the group, which works out as NZ$4.38 per share on average.

Under a change in New Zealand's takeover rules that came into effect on Sunday, both bidders must offer to buy all the shares in Montana and money from bids must be distributed among all the shareholders. A spokesman for Allied said the change would not affect the UK group, which was still committed to acquiring full ownership of Montana.

"We always made an offer for 100 per cent, more recently at NZ$4.80, and our position hasn't changed," said the spokesman, adding that Allied would buy Lion's 19 per cent stake "should it become available".

Allied became interested in Montana after it withdrew from the race to swallow Seagram's drinks portfolio last year. With few global spirits brands up for sale, the fragmented wine industry is the best option for companies looking to expand. Last week, Allied bought California's Buena Vista Winery for $85.5m (£61m), which it said was a "good example of how we plan to build our global wine business".

Analysts said Allied's quest for Montana was boosted by its market value, which is £4.7bn compared with Lion Nathan's £300m market capitalisation.

Alan Gray, an analyst at ING Barings, said: "Allied must clearly have a chance of getting it now, but Lion Nathan won't walk away... Allied will be keen to complete a deal, having experienced difficulties in completing a few deals recently."

Shares in Allied Domecq fell 3.25p yesterday to 440p.