INSIDER

De Bortoli Wines has more than $30 million of investment and superannuation money at risk in teetering base metals miner Kagara.

It is the second time that the Griffith-based family wine group has been caught with multimillion dollar shareholdings in a public company placed into the hands of insolvency practitioners.

Ten years ago it was the $5 billion collapse of insurance group HIH, when De Bortoli Wines took a $14.5 million write-down on the value of its investment. It later failed in a court bid to be counted with creditors for $9.2 million of shares.

This time De Bortoli, and its superannuation fund subsidiary, held 56.8 million shares in Kagara when its shares were suspended the day after Anzac Day. The last 10 million shares had been bought between December and February.

The managing director, Darren De Bortoli, declined to speak about the investment to Insider.

De Bortoli's 2011 accounts show that it spent more than $50 million on sharemarket investments in the year to June 30, and made a near $18 million trading profit. Its total investment portfolio grew from $37.5 million to $69.2 million. To put that in context, De Bortoli's wine sales were $165 million last financial year, and its net profit $16.6 million.

Kagara's total market worth when it was suspended, at 12? a share, was less than $100 million.

The chances of existing shareholders recouping much of their investment receded on Wednesday when administrators from the Taylor Woodings partnership, appointed by Kagara's board on April 30, held the group's first creditors' meeting in Townsville.

Not only did the Taylor Woodings partner Michael Ryan reveal that he planned to apply to the court for a deferral of up to six months before they convene another creditors' meeting - normally held in 21 days - he offered little comfort that Kagara might trade out of its difficulties.

"We will be looking into a range of options, including the sale of non-core assets and recapitalisation of the group, to realise value for the creditors and shareholders," he said in a press release.

Already 216 of the company's employees have been sacked.

Kagara's most saleable asset is its 97.5 million shares in Mungana Goldmines, although that stake's worth has dropped $10 million to $34 million since Kagara appointed administrators. Mr Ryan said that there are more than 830 creditors of Kagara, with claims totalling between $85 million and $95 million - the largest of them the ANZ.

Shareholders caught in Kagara can at least take comfort from the fact that Taylor Woodings, unlike some administrators, seems to be sticking to the continuous disclosure requirements of the ASX.

WAR PAINT

Directors of Dulux Group and its target Alesco Corporation finally pulled off the gloves last night after the paint company lodged its bidder's statement for the $188 million offer.

If the $2-a-share offer was not hostile previously, it is fast heading that way, judging by the language on both sides. Perhaps that has something to do with the fact that, as Insider hears it, the only communications between the sides have been courtesy calls between chairmen and chief executives.

Unusually, Alesco's advisers, Greenhill Caliburn, and Dulux's Macquarie Group team do not seem to have connected.

Dulux's offer document sought to embed uncertainty in the mind of Alesco shareholders, emphasising that a key condition of its offer is Alesco's board confirming that that there are no hidden nasties in the company's current and future accounts. The document also reminded Alesco investors not only that the return on their investment was negative 87 per cent since 2007, but also a New Zealand legal case could cost Alesco penalties equivalent to 12? a share.

The managing director of Dulux, Patrick Houlihan, tried to dampen market expectations of a higher offer, saying: "We see sound strategic merit in this acquisition, but of course we will maintain financial discipline in the interests of our shareholders."

Coming back the other way, a spokesperson for Alesco said: "Given the impact of trough-cycle housing and renovation markets on Alesco's share price, the premium to the last traded pre-announcement price is illusory."

Translated, that means Alesco thinks Dulux is making an opportunistic offer at the bottom of a trough from which the garage door-making company hopes to climb. Hence the target company's assertion yesterday that its board is taking a "through the cycle" approach to valuing the shares.

There is no argument that Alesco made significant strategic missteps just before world markets went into a nosedive, and has paid a hefty price. The test will be whether Alesco shareholders have the intestinal fortitude to resist the offer of $2 now in the hope that new chief Peter Boyd's three-year "Project Restore" campaign can lift the share price to the $2.30 to $2.75 a share values that some are putting on the stock.

LASER BLAST

The Western Sydney engineering specialist LaserBond is expected to rejoin the ASX lists this morning after spending two days in hiatus while it was bedding down a $2.25 million placement.

The Ingleburn company, controlled by founder Greg Hooper and his family, has used Investorfirst Securities to top up its cash reserves so it can expand into Western and South Australia.

LaserBond is enjoying profitable times from demand for its laser repair of heavy machinery surfaces in a time when not only is mining booming, but corporate preferences are to repair rather than buy new.

While the 25? a share placement will not significantly dilute the Hoopers, it is a sign that the family is prepared to loosen its grip if it makes commercial sense.

It has just signed a global contract with Alcoa World Alumina, and numbers among its big customers Scotland's Weir Group - which only a couple of months back lost a $325 million takeover battle for another specialist local engineering house, Ludowici. Insider would not be surprised if LaserBond, capitalised at not much over $20 million, is on its radar.

insider@fairfaxmedia.com.au