Domecq quits Lehmann bid battle

DRINKS giant Allied Domecq has conceded defeat in its A$149m (£61.8m) takeover battle for Australian vintner Peter Lehmann Wines in the face of bitter opposition from the company's founder.

Allied said it would sell its 14.5% stake to rival bidder, the Swiss-based Hess Group.

Both had offered A$4 a share, but Lehmann's directors recommended the Hess offer in the absence of a higher bid.

Allied made clear today it would not be making one. 'We do not believe it would be in the interests of our shareholders,' said chief executive Philip Bowman.

Hess, which during the bidding had said it was quite happy to be PLW's major shareholder and for the company to remain listed in Australia, had already built a 6.4% stake in PLW.

The company's founder, Peter Lehmann, has fought hard to keep it out of Allied's hands as he said he believed it would not maintain the integrity of his life's work.

His opinion holds great sway with other small shareholders in the Barossa Valley where he is something of a trailblazer. At one stage he said Allied should 'pack its bags and get out'.

Lehmann sold a 5.4% stake to Hess but says he does not intend to sell any more of his remaining 10.5% of the company.

Allied has been keen to find an Aussie wine producer. Its Australian spokeswoman, Jane Mussared, said it was a gap in its portfolio, but 'the wine companies have been overpriced'.