Lion Nathan on wine spending spree

By Phil Boeyen, ShareChat Business News Editor

Tuesday 2nd October 2001

Lion Nathan (NZSE: LNN) has revealed plans for its second Australian wine acquisition just days after announcing an offer for Adelaide-based company Banksia Wines.

Lion's new offer is for another Adelaide wine company, Petaluma, and is valued at around A$222 million. The offer is being recommended by Petaluma's directors in the absence of any other bid.

Petaluma was established in 1976 and has been a listed public company since 1993. It has vineyards in the Adelaide Hills, Clare Valley and Coonawarra.

Lion is offering A$7.00 a share for the company, a 40% premium over Friday's closing price of A$5.00 per share.

Lion Nathan boss, Gordon Cairns, describes Petaluma as a leading producer of icon and ultra premium brands from some of Australia's most prized regions with a proven brand focused marketing culture.

"Petaluma has become synonymous with quality and prestige and has attracted domestic and international acclaim. We recognise we are offering a substantial premium to acquire this business and this is a reflection of the very high regard we have for the Petaluma team and the business they have built.

"The Petaluma board, in recommending Lion Nathan's offer, recognises that the price is attractive."

Mr Cairns says the successful acquisition of Petaluma will complement the company's aim of building a globally competitive Australian-based premium wine business, the first step of which was taken last week with its offer for Banksia Wines.

Petaluma says Lion offers an excellent platform to continue the strong growth of Petaluma's premium brands.

One of the conditions of the offer is that Petaluma's US wine partner and distributor, Stimson Lane, confirms that it will not exercise any of its rights in relation to the Bridgewater Mill joint venture and that the venture continues as it is currently.

The Bridgewater Mill joint venture was started last year both with both Petaluma and Stimson Lane putting in several million dollars to produce and export Bridgewater Mill wines, mainly to the United States.

As part of the deal Petaluma sold its West Australian Smithbrook Vineyard to the joint venture along with the supporting plant and equipment, inventory and brand and the Bridgewater Mill brand, inventory and barrels for around A$10.3 million.

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