Competition for Australian producer Peter Lehmann Wines has heated up. British drinks giant Allied Domecq -- which owns wine brands in several countries around the world, but not in Australia -- is duking it out with the smaller Switzerland-based Hess Group for control of the Barossa Valley winery.
After Allied Domecq made a takeover offer valued at a total of nearly $100 million early this week, the Hess group raised its original offer to A$3.85 (US$2.61) for part or all of Peter Lehmann Wines' shares, according to a letter released to shareholders on Wednesday. That's the same price per share as the lower end of Allied Domecq's bid. Shareholders would also receive payment within five days.
"This course of action would provide PLW shareholders with a continuing investment in what has been a very successful company to date," the letter from Hess stated. The group owns The Hess Collection winery in Napa Valley and distributes Argentina's Colomé wines, owned by former Hess chairman Donald Hess, along with South Africa's Glen Carlou wines, of which Hess owns half.
In response, Allied Domecq has now raised its offer to $A4.00 per share. The only condition to that bid Allied Domecq must be able to acquire at least 51 percent of Peter Lehmann shares for shareholders to get this price, according to Allied spokesman Anthony Cardew.
Hess is expected to issue a statement on its bid on Monday, Sept. 29.
Allied Domecq curently holds 14.5 percent of the issued shares in Peter Lehmann, while Hess holds 5.4 percent. Winery founder Peter Lehmann has said he will not sell his 10.5 percent stake in the company to Allied Domecq.
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