Hess to Acquire Peter Lehmann Wines as Allied Domecq Drops Bid
The British drinks giant will not pursue a takeover of the Australian producer, leaving the way clear for a competing bidder.
Allied Domecq, the British drinks giant locked in a bidding war for Australia's Peter Lehmann Wines, announced today that it is pulling its offer, paving the way for the Switzerland-based Hess Group to make the acquisition.
"We have informed the board of Peter Lehmann Wines that we propose to accept the Hess offer for our entire stake," Allied Domecq's chief executive, Philip Bowman, said in a statement. Allied, which wants to add an Australian producer to its global wine portfolio, owns 14.5 percent of shares in the Barossa Valley winery.
"In order to minimize ongoing uncertainty for Peter Lehmann Wines, we would encourage other shareholders to do the same," Bowman added.
On Friday, Peter Lehmann's independent board of directors said they were going to recommend that all shareholders sell to the Hess Group, unless there was a higher offer. Both companies were offering A$4 (US$2.76) per share, with no conditions -- a total of more than $103 million.
"We do not believe it would be in the interests of our shareholders to increase our offer further," Bowman said.
Peter Lehmann, founded in 1979, makes about 600,000 cases a year, including Shiraz and Cabernet Sauvignon bottlings, a red blend named Clancy's, Chardonnay, Riesling and other varietals.
With the acquisition of Allied Domecq's stake, the Hess Group would own more than 20 percent of Peter Lehmann. Hess chairman and chief executive Max Leinhard said he believes that shareholders will begin selling to Hess well before the Oct. 24 deadline and that Hess will acquire "easily 51 percent" of the winery. He added that although "Peter [the winery's founder and namesake] will keep his 10.5 percent and some of his friends loyal to Peter Lehmann will not sell, we may get close to 80 percent of shares. It's just a guess, but I believe we will get quite a lot."
The Hess group owns The Hess Collection winery in Napa Valley and distributes Argentina's Colomé wines and South Africa's Glen Carlou wines.
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