Australian vintner Peter Lehmann Wines Ltd spurned a takeover bid by Allied Domecq Plc, the world's second-biggest spirits group, opting instead for a lower bid by Swiss-based wine distributor Hess Group AG

Food & Drink Weekly, Oct 6, 2003

Australian vintner Peter Lehmann Wines Ltd spurned a takeover bid by Allied Domecq Plc, the world's second-biggest spirits group, opting instead for a lower bid by Swiss-based wine distributor Hess Group AG. Independent directors of Peter Lehmann recommended the A$143.6 million ($99 million) cash offer from Hess Group AG over a rival bid from Allied Domecq that was 3.9 percent higher, arguing the Allied bid was riskier.

Allied Domecq and Hess are locked in a bitter battle, with Hess having won the support of the South Australian Barossa Valley wine maker's founder, Peter Lehmann. Peter Lehmann Wines' independent directors advised shareholders not to sell until closer to the end of the offer period on October 24, in case Allied dropped its conditions or a higher bid emerged. Allied Domecq is eager to acquire Peter Lehmann Wines because it does not already own any Australian wine makers and wants to cash in on strong British, European and U.S. demand for Australian wines. Allied Domecq said it was disappointed and found it curious the board had not recommended the highest offer, but said it was comfortable with its bid at the moment.