Wolverhampton & Dudley Breweries (W&DB) has stepped up its attack against Pubmaster's hostile bid in its formal defence document today (June 25).
In the document to shareholders, it claims the £453m offer is not "serious" and does not reflect the increasing price of shares in the pub sector.
It puts Pubmaster under renewed pressure to raise the value of its bid, which is equal to 480p a share.
W&DB said the price failed to reflect improvements in trading since a profits warning in May 2000, which was caused by squeezed margins.
Chairman David Thompson said: "It takes no account of the sector re-rating, the inherent value of W&DB, our strong recent and current trading performance, or our future potential.
"It is an attempt by Pubmaster to acquire W&DB on the cheap, at the expense of shareholders, and the board of W&DB strongly urges them to reject the offer."
Share prices in pubs and brewing have improved by 38 per cent since August, when the markets began shifting from internet ventures to the "old economy".
W&DB repeated its promise to return £200m to shareholders over the next two years when it has completed its own restructuring. This will see it dispose of two of its four breweries and 170 pubs, including the Pitcher & Piano chain.
Pubmaster has opted to sell all four breweries, worth an estimated £60m. Noble House Leisure, which has dropped a rival bid for W&DB, has agreed to buy 290 of the bigger pubs for £250m.
Institutional shareholders, such as US fund manager Silchester with a 11.3 per cent stake, US fund manager Tweedy Browne with 5.5 per cent, Britannic with 7.2 per cent, and M&G with 5.1 per cent, are said to be looking for 520p - worth about £490m.
Pubmaster to sell Wolves' four breweries (June 14, 2001)
Wolves goes into battle against Pubmaster (June 4, 2001)