PLW backs Hess' decision to raise the stakes
a straight fight between Allied Domecq of the UK and Swiss group
Hess.
The battle for Peter Lehmann Wines now appears to have come down to a straight fight between Allied Domecq of the UK and Swiss group Hess following the latter's decision to raise its bid to match that of its British rival.
Hess has been the front runner in the battle for the Barossa valley winery since the outset, with Allied seemingly running to catch up even though it has consistently outbid the other firm.
But Allied yesterday sought to take the upper hand by removing all the conditions attached to its bid - thus also removing, in theory, all the barriers preventing its bid from being recommended by the Lehmann board.
A week earlier, Lehmann's independent directors had recommended Hess' offer of A$3.85 per share over Allied's A$4.00 per share because the Swiss group's bid had no conditions attached and would see PLW shareholders paid more quickly.
Allied had originally attached a 90 per cent acceptance condition to its offer, but was forced to reduce this to 51 per cent and then remove the condition altogether as Hess countered each move.
But although Hess has now matched Allied's offer of A$4.00 per share for PLW, the Swiss company claims that the two now unconditional offers are not identical.
"These two offers are not the same, and the intentions of the bidders are not the same," the company said, adding that its offer allowed existing PLW shareholders to retain some of their shares while selling others. Allied's offer, in contrast, obliges shareholders to sell their entire stake.
But shareholders have already been urged to sell their entire stake to whichever company wins the takeover battle. Speculation over the deal has kept PLW's share price unnaturally high and shareholders would be unlikely to make as much from selling their shares at a later date.
PLW's independent directors are meeting on Tuesday to discuss the two offers, although they have already hinted that the Swiss firm will get the nod.
In a statement issued today, the company's independent directors highlighted the fact that Hess had forged a positive relationship with PLW, a move which would probably make the transition easier than it would with Allied, and that the British firm was likely to change the dividend payment structure if it was successful.
"Having taken all these factors into account, it is the independent directors' intention to recommend that, on balance, shareholders accept the Hess offer for all their PLW shares, subject to no better offer emerging, but continue to advise that shareholders wait for further advice," the statement read.
The non-independent directors are also backing the Hess bid.
