Wolves steps up defence against Pubmaster
Wolverhampton & Dudley Breweries has stepped up its defence against Pubmaster's hostile takeover offer.
In a new document today (July 23), the brewer pledged to raise £135m by selling some of its pubs and to return £100m to shareholders by the end of this year.
However, Pubmaster alleged that this approach would lead to high debt and that the retail strategy was still unproven.
According to media reports, W&DB has suffered the blow of losing its director of pub retailing, Patrick Dardis, who has resigned to join an internet venture. Although he is not on the board, Mr Dardis is involved in developing the pub estate, which includes the core Bostin' Local brand.
In April, Pubmaster launched a hostile takeover bid, valuing the brewer at £453m, after earlier offers were rejected by the board.
At the end of last week, Pubmaster revealed that it had so far received backing from shareholders with a total stake of only 9.8 per cent.
With the final deadline for acceptances on August 13, the pub operator has refused to raise the value of its bid.
W&DB said today that it had received indicative offers for 112 of the 170 pubs that it has earmarked for disposal, which would raise £121m.
It predicted the total proceeds from the whole package, which includes the Pitcher & Piano chain, would be about £135m. Regent Inns is believed to have agreed a deal to buy the Pitcher & Piano bars.
W&DB today predicted growth for the year to September 29, 2001, claiming pre-tax profits would be up by 16.9 per cent to £76m.
It also revised the promise it made in April to return £200m to shareholders within two years through a share buyback.
But today it revealed that it had decided to launch a £100m tender offer within six months while still paying the remaining £100m before April 2003.
A tender offer would be more attractive for private investors since it allows all shareholders to sell their stock for the best price, while a share buyback would favour larger institutional investors.
W&DB chairman David Thompson said: "'Our profit forecast today demonstrates the good underlying trading improvements we have achieved since March last year despite the distractions of being in an offer period for nearly a year.
"Current trading is good. We have a clear and proven strategy in place to exploit the core strengths of the business while returning up to £200m in cash to shareholders.
"Pubmaster's offer represents poor value for W&DB's strong cash generation, valuable assets and improved trading outlook and completely fails to take account of the sector re-rating over the last year."
The pub and regional brewer sector has enjoyed a 40 per cent uplift in share values on the stock exchange since Pubmaster launched its bid.
The takeover battle, which formally started nearly 12 months ago with an approach by pub and restaurant group Noble House Leisure, has become increasingly bitter. Last week, it moved to the High Court when W&DB accused Pubmaster of releasing confidential information about its breweries to rivals Carlsberg-Tetley and Bass Brewers.
Related stories:
Pubmaster gains less than 10 per cent backing for Wolves offer (July 20, 2001)
Wolves begins court action against Pubmaster (July 17, 2001)
Wolves launches defence against Pubmaster (25 June, 2001)
