Pubmaster raises offer for Wolves
Pubmaster has strengthened its hostile bid for Wolverhampton & Dudley Breweries (W&DB) by raising its offer to £485m.
On Monday (July 30), the pub group said it would give investors 513p a share - about seven per cent more than its original 480p.
The original price, which valued W&DB at £453m, was increased with only two weeks to go before the final deadline for acceptances.
But it was rejected again by the brewer's board, who attacked it as "penny-pinching" and "significantly" undervaluing the business.
So far, Pubmaster's offer has been accepted by investors with stakes totalling 16.8 per cent of shares, which includes top institutional shareholder Tweedy Browne.
The increase in the offer followed last week's final defence document from W&DB's directors, which made new promises to fight off Pubmaster's bid.
The brewer pledged to raise £135m by selling some of its pubs, including the Pitcher & Piano bar chain. It also said it would return £100m to shareholders by the end of this year and another £100m by April 2003 through a share buyback.
But Pubmaster chief executive John Sands (pictured) said W&DB's strategy would leave it with a high level of borrowings, which is reflected in its gearing.
"In its increasingly desperate attempts to remain independent, W&DB has resorted to a scorched earth defence which will leave the company over-geared," Mr Sands said.
He attacked W&DB's prediction that pre-tax profits would be up by 16.9 per cent to £76m this year, dismissing it as a "loose" statement.
He also questioned the brewer's decision to focus on developing its community pub brand, Bostin' Local.
"W&DB shareholders should not tolerate any further value destruction from the current management and accept the excellent price and certainty on offer," Mr Sands said.
W&DB's board rejected the new offer, saying it would still lead to less income for shareholders and "significantly" undervalued the company.
Chairman David Thompson said: "This penny-pinching offer comprehensively ignores the re-rating of the sector and the significantly improved performance of W&DB since the current offer period began almost a year ago.
"Our planned cash return of up to 212p per share, plus the retention of shares in an asset rich, soundly financed, focused and growing company, is worth considerably more than Pubmaster's offer.
"The increased offer fundamentally undervalues W&DB, and the Board therefore continues to advise shareholders to reject it."
Related stories:
Pubmaster renews attack on Wolves (July 24, 2001)
Wolves steps up defence against Pubmaster (July 23, 2001)
Wolves begins court action against Pubmaster (July 17, 2001)
