Wolves goes into battle against Pubmaster

The directors of Wolverhampton & Dudley Breweries (W&DB) have pledged to fight Pubmaster's hostile bid.

Last week, the board rejected an offer from the pub operator that valued their company at about £472m.

Pubmaster has now approached shareholders directly with a hostile offer which values it at the lower price of £453m.

But W&DB, which has begun its own restructuring plan, said it "intends to resist this offer vigorously".

Chairman David Miller accused Pubmaster of "trying to buy W&DB on the cheap".

"Its offer fails to reflect the performance of the company in raising margins, increasing earnings and driving down debt, and the plans we have announced to deliver value by focusing on our core strengths and returning cash to shareholders," he said.

Urging shareholders to rebuff Pubmaster, the company added: "W&DB intends to continue to pursue the improvements to its business set out in the strategic plan. These build on W&DB's strengths as a leading community pub operator concentrated in its Midlands heartland and supported by leading ale brands."

According to City analysts, it is unlikely that Pubmaster would be successful unless it substantially raises its offer to at least £472m. One institutional shareholder, Tweedy Browne, suggested it would not consider an offer below £486m.

W&DB plans to sell or close two of its four breweries and to dispose of 170 managed and tenanted pubs, including the Pitcher & Piano chain.

In April, it rejected indicative offers from Pubmaster and restaurant group Noble House Leisure, who were given until Friday (June 1) to come up with formal bids. Noble House Leisure, which first made an approach to W&DB last August, has dropped out of the race and agreed to buy some of W&DB's pubs from Pubmaster instead.

Related stories:

Wolves rejects new Pubmaster bid (June 2, 2001)

Wolves reports profits uplift as it awaits bid (May 23, 2001)

Noble House backs Pubmaster over Wolves (May 3, 2001)