Forum Archive Index - August 2001

["Ken Donelan" <kdonelan@ihug.co.nz>]

The following article comes from the U.K. Sunday Times:

 

ONLY a brave reporter would call anyone at 4am to chat about
 a story. But when a journalist called an Allied Domecq press
 person in the wee hours of Friday morning to tell her Allied's
 takeover bid for Montana Wines in New Zealand had secured a
 crucial stake, she (almost) forgave the intrusion. Lion Nathan
 had finally given in and decided to sell its 43% shareholding in
 Montana to Allied.

 

 But the hoops Allied had to go through to win the company
 were stupendous, and prove that New Zealand's corporate
 governance capabilities are still in the Laurel and Hardy class.

 

 Allied made its first offer in February, but was met with a
 counter-offer from Lion Nathan. In a manoeuvre that would have
 been blocked in almost any other civilised country, Lion bid for
 only enough shares to take it to 51%. New Zealand had, or so I
 had thought, adopted rules several years ago forcing any
 shareholder with more than 20% to make a full bid. But the
 exchange had forgotten to implement its planned rules.

 

 So Lion went ahead with its selective offer and was stopped
 only when its adviser's method of purchasing the shares was
 deemed to have broken the rules. Even then the farce
 continued, with the regulators asking Montana's independent
 directors to decide how much of its holding Lion should be
 forced to sell.

 

 The sale itself also created deep suspicion - many suspected
 some buyers had secretly agreed to sell back to Lion should it
 find a way to revive its bid.

 

 In the end, Lion gave up the attempt and sold out.

 

 It is more than a decade since I left New Zealand. Its ability to
 breed weak-kneed, fumbling regulators and Wild West
 businessmen hasn't changed a bit.

 

Kirstie Hamilton