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Lion Nathan Takes Majority Stake in Petaluma of Australia

The Australian brewer sweetened the deal for shareholders, valuing the wine producer at nearly $115 million.

Jacob Gaffney
Posted: October 31, 2001

Bucking speculation that it would end up in a bidding war over Petaluma Ltd., brewer Lion Nathan announced last week that it had acquired a majority stake in the publicly held Australian wine producer.

"We now have agreements for 54 percent of Petaluma," said Warwick Bryan, director of investor relations for Lion Nathan, which owns breweries in Australia, China and New Zealand. "It is still subject to approval with the Foreign Investment Review Board, but it is almost a done deal."

In early October, after previously losing out in a struggle for control over New Zealand's Montana Wines, Lion Nathan made an unexpected takeover bid for Petaluma. The producer owns Australian wineries such as Petaluma, Mitchelton, Knappstein and Stonier's, as well as Argyle, an Oregon winery that makes some of the state's best sparkling wines, Chardonnays and Pinot Noirs.

Petaluma also has a joint venture with Washington-based wine group Stimson Lane, owner of Chateau Ste. Michelle and Columbia Crest, to make Bridgewater Mill wines in Australia and market them in the United States. Lion Nathan has said that continuation of this agreement is key to the deal.

On Oct. 24, Lion Nathan declared that it had received agreements for 16.1 million shares of Petaluma, representing 50.7 percent of the company.

Earlier in the week, on Oct. 22, Lion Nathan had upped its offer for Petaluma from A$7 per share to A$7.27 (US$3.64), making the Australian producer worth around A$229 million (close to US$115 million). Its original Oct. 2 offer valued the company at about A$222 million (almost US$110 million).

The increase in Lion Nathan's offer fueled reports that other large wine-and-spirits companies, such as London-based Allied Domecq and Diageo, were considering making a bid for control of Petaluma.

Officials from both Allied Domecq and Diageo would not comment on any possible future acquisitions, but downplayed their interest in Petaluma.

Regardless of any competing bids, Lion Nathan is convinced it will own the company because Petaluma CEO Brian Croser and the other founding shareholders of Petaluma have accepted the offer, said Bryan. "Even if any of the London companies make an offer, it won't be accepted."

In a corporate statement, Petaluma director Chris Roberts endorsed the Lion Nathan bid: "The board of Petaluma is confident that the increased offer is in the best interests of all our shareholders, employees, customers and suppliers. All of the directors of Petaluma intend accepting the increased offer with respect to all their personal holdings. The board recommends that all shareholders accept the offer as soon as possible."

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Check out ratings of Argyle, Bridgewater Mill, Mitchelton, Petaluma and Stonier's wines.

Read more about Petaluma:

  • Oct. 2, 2001
    Brewer Makes Takeover Bid for Australia's Petaluma Winery

  • July 18, 2000
    Australian Wine Company to Buy Premium Oregon Winery

  • Dec. 23, 1999
    Stimson Lane Expands Global Reach With Australian Venture

    Read more about Lion Nathan:

  • Oct. 2, 2001
    Brewer Makes Takeover Bid for Australia's Petaluma Winery

  • Aug. 27, 2001
    Allied Domecq Triumphs in Fight for Montana Wines
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