Domecq blow in Aussie wine battle

PHILIP Bowman, Allied Domecq's Australian-born chief executive, today suffered a blow to his Aussie wine ambitions as bid target Peter Lehmann Wines did an about-face in favour of a lower Swiss offer.

In an eccentric twist to an already bumpy bidding process, Lehmann's independent directors recommended an offer from Swiss Hess Group, a privately-owned wine distributor, which has offered A$3.85 (£1.59) a share with no conditions.

Allied raised its bid last Thursday to A$4 a share from A$3.85, conditional on it winning at least 51% control.

'The directors also note that the situation with Allied and Hess remains fluid and so advise shareholders to wait,' Peter Lehmann said in its statement.

The directors had previously backed the Allied bid. Since then, however, the company's eponymous founder has spoken in blunt terms about his dislike of multinationals and thrown his influence behind Hess, saying Allied should sell its current stake and 'get the hell out'.

Lehmann fears the drinks giant will destroy the individual character of the company and brand he created. As a pioneer of the Barossa Valley wine industry in South Australia, his word holds great sway with local grape growers, many of whom are on the PLW share register and could block any Allied deal.

He indicated last week that he would try to do precisely that. '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.