AUSTRALIA: Allied drops out of PLW battle
The UK drinks group Allied Domecq has dropped its attempt to buy the Australian winemaker Peter Lehmann Wines and in doing so opened the door for the Swiss group Hess to pursue its takeover attempt unhindered.
Allied said today that it would sell its 14.5% stake in the Barossa Valley wine maker to Hess Group AG. Allied is the biggest single shareholder in PLW.
The move follows a fortnight of bids and counter bids by the rival drinks groups for PLW. However the balance shifted decidedly in favour of Hess when its bid was preferred by Peter Lehmann's independent directors.
However, it appears that Allied finally decided the bidding was getting a bit rich.
Both companies had offered A$4.00 a share cash, which represented a multiple of 19.8 times Peter Lehmann Wines 2003 earnings before interest, tax, depreciation and amortisation.
Recent wine industry acquisitions have taken place well below this multiple.
Despite its success, Hess is still unlikely to take full control of the company. It already controls 6.2% of the stock but has said it would be happy to be Lehmann's major shareholder and have it remain as a listed company on the Australian Stock Exchange.
The wine maker's founder, Peter Lehmann, has already indicated that he will not sell his remaining 10.5% stake in the company. He has already sold a 5.4% stake to Hess.
Lehmann said: "It's my expectation and my wish that we remain publicly listed. I know lots of my mates have said they will sell, a half, a quarter or other portion of their shares so we'll still have a very healthy publicly listed company."
Lehmann also smoothed over tensions between the company’s independent directors and the family holding which became public at the height of the Allied-Hess battle. “We’re still mates,” said Lehmann.
PLW chairman Richard England said that Allied dropping out the race had simplified the situation.
And in a statement to shareholders the company said: "Shareholders should capitalize on this opportunity to secure a premium value for their Peter Lehmann Wine shares and accept the Hess Offer for all Peter Lehmann Wine shares without delay."
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