Lion cancels offer for Montana shares

On July 25, the Australian brewer Lion Nathan formally withdrew its two-tier offer for the shares of New Zealand winemaker Montana, leaving the field clear for its rival Allied Domecq, the British liquor group, to buy more stock in the bitterly contested battle for control of the wine company, reports the Financial Times​. Lion Nathan is still the favourite to acquire Montana after its withdrawal, which follows last week's ruling by the Takeovers Panel that said Lion was attempting to breach the new takeover code by bidding for Montana shares at two different prices. The authorities have ruled that Lion must sell a 19 per cent stake in Montana by August 12 and must not buy any further shares until after that date. After selling the 19 per cent stake, it will still own some 43 per cent of Montana. Allied has 27 per cent, and is making slow progress increasing this percentage as only 11 per cent of Montana is not in the hands of the two main rivals. Many shares are held by trusts that are not legally able to sell. Even if Allied bought the entire 19 per cent Lion has to give up, it would not gain a controlling 51 per cent stake in the wine company. Institutional and other investors are likely to bid for the forfeited shares, in the hope of extracting a higher price for them from either Lion or Allied.