Wolves poised to snap up Jennings for £46m
by Ewan Turney
Wolverhampton & Dudley Breweries is set to take over Cumbrian brewer and pub operator Jennings Brothers after making a 430p-per-share offer.
The deal would value Jennings at £46m, a premium of 32% on the company's share price on Friday of 325p.
Jennings' largest shareholder, Frederic Robinson, with a 25.1% stake in the company, has agreed to accept an offer of at least 360p per share in cash by Wolves. In addition, a subsidiary of Wolves holds a 0.1% stake.
Wolves believes Jennings' estate of 128 leased and tenanted pubs in the north of England is "an excellent geographic fit" with its existing business, particularlyfollowing the acquisition of Burtonwood. The company said it was consistent with its strategy to develop organically and through selective acquisitions.
Wolves will continue to produce Jennings' range of beers, which includes Cumberland Ale, at its Cockermouth brewery.
"We believe that, if final terms can be agreed, Wolves would provide a good home for Jennings," said Jennings chairman John Rudgard. "Jennings' high quality pub business and strong brands represent an excellent geographic fit with Wolves' existing operations. The deal would protect and develop Jennings' heritage within a far larger and stronger group."
Wolves chief executive Ralph Findlay said the proposed take-over would "assist in the further development of the business and provide good opportunities for its lessees, beer brands and for employees."
However, the Campaign for Real Ale (Camra) criticised the move, claiming there would be "no benefit for the consumer" from the deal. "We are obviously very concerned," said research and development manager Iain Loe.
"While Jennings seems to have welcomed the move, we don't think it is in their best interests. In the long run we may see the closure of the brewery.
"There should be some sort of control on how big these companies are allowed to grow. We will be seeking a meeting with Wolves directors to express our concerns."
Former Jennings' managing director Trevor Green described the W&D bid as a black day for Cumbria and a black day for the regional brewing industry.
Green predicted W&D would be forced to make considerable savings, almost certainly starting with staff cuts, to justify the generosity of its bid.
"If Jennings had been more determined to preserve its independence it should have maintained a multi-stranded business, instead of selling off chunks of the company," he said.
"Once they made the decision to reshape the company, they left themselves more vulnerable."
Green who ran the brewery for 11 years, rescuing the company from virtual oblivion when he arrived in 1989, said he feared for some of the smaller barrelage pubs in Cumbria which W&D would now acquire. "I do not know if pubs turning over less than four barrels a week will fit into W&D's plans," he said.
