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Monday, 30 July, 2001, 14:23 GMT 15:23 UK
Pub fight hots up
Prince Charles drinks in a pub
Prince Charles sings the praises of the British pub
The battle to acquire Wolverhampton & Dudley Breweries (W&DB), one of Britain's few remaining medium-sized regional beer producers, is hotting up.

W&DB said it had rejected an offer of 513p per share - valuing the firm at 485m - from Pubmaster, a pub-management consortium led by German bank WestLB.

This penny-pinching offer comprehensively ignores... the significantly improved performance of W&DB

David Thompson, Wolverhampton & Dudley

On Monday morning, Pubmaster announced it had raised its bid price from 480p.

The hostile takeover bid has caused alarm among fans of W&DB, who say it could lead to the demise of its traditional beer brands such as Bank's and Marston's.

On the same day, Camra, the Campaign for Real Ale, appealed to trade and industry minister Patricia Hewitt to safeguard British jobs in the brewing industry.

Camra warned that the Pubmaster bid would see thousands more pubs fall into the clutches of foreign investors.

One in six British pubs is already controlled by Japanese and German banks, Camra said.


As it raised its price, Pubmaster argued forcefully for W&DB shareholders to agree to its terms.

Trade and industry secretary Patricia Hewitt
Hewitt: Calls to halt Pubmaster bid

Pubmaster chief executive John Sands said shareholders should accept the "excellent price and certainty" on offer.

He claimed that W&DB's defence strategy, which included returning 200m to investors over two years, relied on borrowing cash, and amounted to a "scorched-earth policy".

W&DB also has plans for share buybacks, pub sales and a move to focus production on two of its four breweries in its defence plan.

The Pubmaster consortium said its increased price had appealed to some of W&DB's institutional shareholders, and that it had already acceptances worth 16.8% of the brewer's shares.

Mr Sands said the offer would not be extended beyond 1200 GMT on 13 August.

Wolves bite back

W&DB, which operates 1,770 pubs in addition to its brewing interests, flatly rejected the offer.

"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," said chairman David Thompson in a statement.

Nor was the City impressed: W&DB's shares rose only marginally on the increased offer.

After a solid trading update last week, many analysts say the company is now worth at least 15p per share more than the raised Pubmaster offer.

Pub problems

A typical British pub
Real ale enthusiasts bemoan the rise of big pub chains

The struggle comes at a sensitive time for lovers of the British pub.

Prince Charles last week extolled the virtues of the pub as the focus of community life, amid concerns that its traditional clientele were deserting it to sit in front of the TV.

And Camra has just unveiled a new publicity campaign, aimed at persuading consumers - especially young women - of the natural qualities of real ale.

See also:

19 Jul 01 | UK Politics
MP fights brewery takeover
19 Jul 01 | Business
Beck's beer up for sale
04 Jun 01 | Business
Brewer defends independence
31 May 01 | Business
SAB eyes Bass Brewers
10 May 01 | Business
Foster's 'not aware' of Heineken bid
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