Allied Domecq set to fight for Lehmann?
acquisition in Australia. A pity, then, that the company has just
accepted a takeover offer from Swiss group Hess.
Allied Domecq, the British spirits and wine company which has tried unsuccessfully to acquire Australian winery Peter Lehmann Wines (PLW), is rumoured to be preparing a counter offer after PLW accepted a bid from Switzerland's Hess Group last week.
Hess, which owns wineries in the US, Argentina, South Africa and Switzerland, has offered to pay A$3.50 per share for PLW, valuing it at A$133 million, and has already taken a 5.4 per cent stake in the company by acquiring shares from the company's founder, Peter Lehmann. Lehmann will retain a 10 per cent stake in the winery.
Allied has been sniffing around PLW for over a year as part of its new strategy of moving into the premium wine sector. The company already owns New Zealand winery Montana, as well as Spain's Bodegas & Bebidas and France's Champagne Mumm, and has managed to build up a 14.5 per cent stake in PLW through various minor transactions. Recent talks between the two parties regarding a distribution alliance came to nothing.
The Hess offer is said to be dependent on a number of conditions, including a minimum acceptance of 35 per cent and Hess receiving approval from the Australian authorities.
AD has not commented on the Hess deal, but given its fierce battle with Lion Nathan for control of Montana a few years back, it is not likely to be put off by the fact that an offer is already on the table.
These are not good times for Australian wineries, with over production leading to falling prices. PLW said its net profits fell by 22 per cent to A$5.42 million for the year to June on the back of sales of A$46.64 million.
But the low price environment, exacerbated by retailers' heavy discounting of many wines, appears to be on the way out, with the market likely to return to more normal levels this year.
