Whitbread under attack?

Bass could be the UK's leading pubs operator

Leisure company Bass is reportedly mulling a takeover bid for its rival, Whitbread, to become the UK's leading pubs operator.

According to a report in the Sunday Telegraph, Bass has prepared strategy documents regarding a takeover bid.

But the paper said Bass chairman, Sir Ian Prosser, still has to make a final decision about the potential bid.

The news follows speculation that Bass is about to sell its brewing operations to Belgium's Interbrew for £2.2m as part of a huge shake-up in the brewing industry.

That would pave the way for Bass to make a bid for Whitbread as it would ease regulatory issues, the Telegraph said.

Whitbread plans action

"A Bass bid for Whitbread is the most likely option now," an investment banker adviser was quoted as saying.

"We have been aware of it for some time and we have prepared a defence," the adviser said.

Bass would finance its takeover bid from the sell-off of its brewing operations.

Under its current takeover plans, it would bid 700 pence a share for the company, a large premium from Whitbread's Friday close of 542.5 pence.

Whitbread recently sold its brewing operations to Interbrew in an efforts to concentrate on its other interests.

It owns restaurants, hotels and fitness, such as Marriott Hotels, Swallow, David Lloyd Leisure, Beefeater, Pizza Hut and Costa Coffee.

Bass would benefit not only from a bigger pubs division if it took over Whitbread - it would own Whitbread's UK Marriott operations and rebrand it with its Holiday Inn name.

Whitbread's budget Travel Inn chain, which has more than 13,000 rooms would also fit in nicely with Bass' strategy.