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Southcorp ‘takeover bait’ as share trading halt called

Embattled Australian winemaker Southcorp called a halt to trading in its shares yesterday after worse than expected April trading figures.

With the Australian press speculating that the giant company – owner of Penfolds, Lindemans and Rosemount – will soon become ‘takeover bait’, Southcorp said it was ‘reviewing financial expectations for the second half of this financial year,’ the Sydney Morning Herald reports today.

It is understood Southcorp is being forced to revise its forecasts for the months of May and June – traditionally strong months – after a sharp fall in sales volumes in Britain. The company is expected to make the announcement on Monday.

Some analysts voiced fears that the company’s US sales could be heading for the same downturn they suffered in the UK, where poor performance resulted in a February profit warning.

‘The biggest fear of all is that there are problems in the US,’ John Bergin of Alliance Capital Management told the Herald.

The announcement comes two weeks after John Ballard was appointed chief executive. His predecessor Keith Lambert was sacked in February, and chief financial officer Peter Cleaves resigned in early April.

There is continued speculation that Foster’s Group might take over the struggling giant. In February Foster’s chief Ted Kunkel described the possibility as ‘remote’.

Written by Adam Lechmere, and agencies9 May 2003

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