Botts & Co and Noble House Leisure are appealing directly to Wolverhampton & Dudley Breweries' shareholders to support an increased offer for the Midlands-based brewer and pub owner.

Wolves rejected a 500p-a-share indicative offer for the second time on Tuesday. But the bidders are thought to be ready to raise their offer to more than 550p subject to due diligence.

Wolves' institutional investors are becoming increasingly frustrated with the company's refusal to negotiate. (See Main Headlines) Institutional investors hold about 30% of Wolves' 94.4m outstanding shares.

Wolves scotched suggestions last Tuesday that several significant shareholders wanted the company to accept the original indicative offer. But it is coming under increasing pressure to re-open talks.

Noble House, the investment company headed by Robert Breare, and Botts, the venture capital house, revealed last week they had the backing of Bank of Scotland, Donaldson, Merrill Lynch and Lufkin & Jenrette.

Wolves could now decide to go another route and sell itself through an auction instead of negotiating solely with Botts and Noble House. The company, whose interests include the Banks's and Pedigree beer brands and pub and bar interests, including Pitcher & Piano, is in the middle of a strategic review. Many believe this will lead to the closure of up to two of its breweries, with Mansfield and the Cameron's plant in Hartlepool heading the list.

Greene King will be the only major regional brewing and pub operator left on the stock market if Wolves is taken out and it too could prove vulnerable to a suitor despite its strength compared with Wolves.