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Lion allowed to feast on Montana - but other diners are around

By Ben Dutton

Friday 8th December 2000

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Lion Nathan's (NZSE: LNN) first hurdle of acquiring Montana Group (NZSE: MON) has been cleared, with the Commerce Commission giving the go ahead for a takeover.

But it is not going to be all smooth sailing for the Australasian brewing giant - Montana chairman Peter Masfen indicated early this week that he also wanted to take a majority control of the wine maker.

The two may now have to battle it out in the market to raise their respective stakes. Masfen already owns 20% of Montana, and Lion 28.2%. Both want to acquire shares in the $3.20 to $3.80 range.

Lion Nathan's CFO, Paul Lockey, says that he welcomes the Commission's ruling. "Under the filed RTN (Restricted Transfer Notice) we can acquire additional Montana shares from 15 December. The price we pay will be at a level that represents good investment value."

Commerce Commission Chairman John Belgrave says that the Commission was satisfied that the proposal would not, or would not be likely to result, in Lion Nathan acquiring or strengthening a dominant position in any market.

The sharemarket had been expecting the Commission to grant clearance for the takeover. Shares have been trading hands this week at above the $3.80 benchmark set by Lion and Masfen, an indication that some investors may expect a bidding war to start.

What happens next will certainly be intriguing for market watchers. Lion will never gain complete control of Montana without buying Masfen's stake. Some people suspect that Masfen's announcement to buy more shares is a ploy to force a better price out of Lion.

The vast majority of Montana's shareholders certainly will not be complaining about the latest turn of events - Montana's share price has doubled since April this year, finishing the week at $3.80.

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