Pubmaster, the tenanted pub group, finally launched a hostile bid for Wolverhampton & Dudley Breweries late last Friday after the Wolves board had rejected a takeover offer of 491p a share the previous day.
Pubmaster's hostile bid is at just 480p a share, valuing Wolves, its four breweries and 1,770 managed and tenanted pubs at £453.4m.
Wolves, unsurprisingly immediately rejected the bid as undervaluing the group. One American investor Tweedy Browne, which has 6.3% of Wolves, also said the 480p a share bid was "not acceptable".It said nothing short of 515p was acceptable after Pubmaster had indicated an offer of 510p to 515p in May before a rival bidder, Robert Breare of Noble House Leisure, dropped out of the race.
Wolves' chairman, David Miller, declared: "Pubmaster is trying to buy W&D on the cheap." He said the offer failed to reflect the group's increasing earnings and profit margins, reducing debts and plans to focus on its core areas and return cash to its shareholders.
The hostile bid was made only an hour before the deadline imposed by the Takeover Panel for Pubmaster to announce a formal offer or withdraw its interest.
Pubmaster said: "We want to give the opportunity to W&D shareholders to have their say." The cash bid will include a partial loan note alternative.
Pubmaster, which runs 2,000 tenanted pubs, said its bid represents a premium of around 35.2 % on the share price in early August before Breare, backed by the private equity group Botts, first expressed an interest.
Breare had indicated a bid at 500p a share and said he could go as high as 550p, while Pubmaster's indicated bid of 510p to 515p in May valued the group as high as £485ms.
In early May, Breare dropped his bid for
Wolves, after a deal with Pubmaster thast it would sell him up to 290 of Wolves' managed pubs, including the 39-strong Pitcher & Piano chain, if its bid for Wolves was successful.
Late last month, Wolves rejected all offers and announced details of its own strategic plan, to close one brewery, sell another, get rid of 170 pubs and bars, includiong Pitcher & Piano, and return £200m to shareholders.
It plans to focus on two breweries at Wolverhampton and Burton-upon-Trent and 1,600 pubs, 550 managed, the rest tenanted.
Wolves became a takeover target last year after a profits warning and a poor share performance.
In the last half-hour of trading on Friday almost 120,000 Wolves shares changed hands, pushing the price up 4.2% on the day from 453.5p to 472.5p. The stock has risen from 322p last August when bid hopes first emerged.
Pubmaster's hostile bid is at just 480p a share, valuing Wolves, its four breweries and 1,770 managed and tenanted pubs at £453.4m.
Wolves, unsurprisingly immediately rejected the bid as undervaluing the group. One American investor Tweedy Browne, which has 6.3% of Wolves, also said the 480p a share bid was "not acceptable".It said nothing short of 515p was acceptable after Pubmaster had indicated an offer of 510p to 515p in May before a rival bidder, Robert Breare of Noble House Leisure, dropped out of the race.
Wolves' chairman, David Miller, declared: "Pubmaster is trying to buy W&D on the cheap." He said the offer failed to reflect the group's increasing earnings and profit margins, reducing debts and plans to focus on its core areas and return cash to its shareholders.
The hostile bid was made only an hour before the deadline imposed by the Takeover Panel for Pubmaster to announce a formal offer or withdraw its interest.
Pubmaster said: "We want to give the opportunity to W&D shareholders to have their say." The cash bid will include a partial loan note alternative.
Pubmaster, which runs 2,000 tenanted pubs, said its bid represents a premium of around 35.2 % on the share price in early August before Breare, backed by the private equity group Botts, first expressed an interest.
Breare had indicated a bid at 500p a share and said he could go as high as 550p, while Pubmaster's indicated bid of 510p to 515p in May valued the group as high as £485ms.
In early May, Breare dropped his bid for
Wolves, after a deal with Pubmaster thast it would sell him up to 290 of Wolves' managed pubs, including the 39-strong Pitcher & Piano chain, if its bid for Wolves was successful.
Late last month, Wolves rejected all offers and announced details of its own strategic plan, to close one brewery, sell another, get rid of 170 pubs and bars, includiong Pitcher & Piano, and return £200m to shareholders.
It plans to focus on two breweries at Wolverhampton and Burton-upon-Trent and 1,600 pubs, 550 managed, the rest tenanted.
Wolves became a takeover target last year after a profits warning and a poor share performance.
In the last half-hour of trading on Friday almost 120,000 Wolves shares changed hands, pushing the price up 4.2% on the day from 453.5p to 472.5p. The stock has risen from 322p last August when bid hopes first emerged.
