Domecq's Aussie 'knockout' blow

DRINKS giant Allied Domecq today attempted a one-two combination to deliver a knockout £60m takeover offer for Australian wine maker Peter Lehmann Wines, of which it already owns 14.5%.

The UK group, facing a rival bid from Swiss-owned Hess, has increased its cash offer from $3.85 a share to $4. On Wednesday Hess raised its bid by 10% to $3.85 after winning the backing of Lehmann's 73-year-old founder.

Allied initially offered $4 on condition that it received 90% acceptance. That demand has now been dropped but it says PLW's shareholders would be better off selling it all their shares than risk being locked into a minority shareholding in an Australian company controlled by a private Swiss group. However, Hess is widely expected to make a new offer soon.

Founder Peter Lehmann favours Hess as he feels it would be a better fit and would preserve Australian company's local identity. He sold a 5.4% of his 16% holding to Hess before the Swiss launched their offer yesterday.

Speaking to the Evening Standard today from Montreal an hour before the new Allied bid was unveiled, Lehmann said there was little chance he could support any bid from the UK giant.

'It's nothing personal against Allied, but why would I want to see the company which is my life's work fall into the hands of a multinational, any multi-national?' he said. 'They might not destroy it, but they would change it completely and I would not wish to see that happen.'

Lehmann described Allied senior management as 'rude and remiss' for not attempting to contact him when the company first appeared on the Lehmann share register 18 months ago.

'I'm urging the other shareholders to do exactly what I have done, which is sell around one-third of their shareholding to Hess, and make a nice little profit,' he said.

'That would give Hess around 35%-40%, and their stake and mine would then protect us from hostile takeover.'