Keeping up the fight
W&DB won the buy-out battle but now it must deliver results. By Mark Ludmon
After a well-earned holiday in Greece, Ralph Findlay is back to run Wolverhampton & Dudley Breweries (W&DB) after a year-long battle fighting off predators.
He and the management team now have to prove that they can deliver the promises that they made to shareholders. While they may have narrowly won this battle, there were still investors with 47 per cent of shares who backed the £485m bid from pub group Pubmaster.
Mr Findlay, who took over as chief executive from chairman David Thompson earlier this year, said: "It is now time to get on with running our business."
W&DB has pledged to give £200m to shareholders over the next two years by buying back shares. It also aims to improve the business by streamlining both the brewing and retailing sides.
The first step will be focusing its estate on community pubs, which include the relatively new Bostin Local concept. This involves selling 170 pubs and bars, including its Pitcher & Piano and Varsity bar chains, which is expected to raise about £135m.
Its next move will be to halve the number of breweries it owns, leaving it with Marston's in Burton-on-Trent, Staffordshire, and Banks's in Wolverhampton.
It intends to close Mansfield Brewery, which it bought two years ago, although a former managing director, Ron Kirk, hopes that W&DB will consider an alternative buy-in deal that he is heading.
Castle Eden Brewery is also looking for a larger production site within Hartlepool and is lined up to buy the neighbouring Camerons.
Under UK takeover rules, Pubmaster cannot make another takeover approach for at least a year. Noble House Leisure, which launched its own bid last August before pulling out in May, will also have to wait until next year before it can consider another assault on W&DB.
Both have indicated that they will look again at making an offer, so Mr Findlay and his team are under a great deal of pressure to succeed.
In the meantime, Pubmaster's chief executive John Sands insists that "it is not the end of the world" and the company is looking around for other deals.
Similarly, Noble House Leisure chairman Robert Breare has been busy since pulling out of the race. He was also due to pick up 290 of W&DB's managed houses if Pubmaster won the battle.
Mr Breare said he was "very keen" to look at W&DB again in a year's time if the share price remained below 500p - he offered shareholders 513p a share while the price last month languished at 475p.
In July, Noble House snapped up 214 pubs from Scottish & Newcastle Retail for £94m, of which it intends to keep only 120. It also wants to expand its Oriental restaurant business to 50 sites by the end of this year. It currently has 18, including 12 Jim Thompson's and six Yellow River Cafés.
Despite the W&DB setback, Mr Breare said he was still on target to have 400 pubs by the end of 2002, developing two sides to the business - town centre pubs and destination pubs.
Within days of the failure of Pubmaster's bid, Noble House was said to be in talks to buy the 129-strong Old English Inns for nearly £100m.
Mr Breare, who is due to speak at The Publican Conference on November 1, has also said he may float Noble House on the stock exchange in 2003 or 2004.
All the players in the year-long saga over the future of W&DB are putting the past behind them and pressing ahead, but it is clear that none of them can afford to stand still.
