Wolverhampton & Dudley Breweries this morning confirmed that it has agreed to make a 430p per share offer for Jennings Brothers, valuing the company at approximately £45.8m.
The offer represents a premium of 32% on Jennings’ share price the day before discussions between the two companies were announced.
Wolves has so far received acceptances representing 26.85% of Jennings’ issued shares.
John Rudgard, the chairman of Jennings, said: "Jennings' high quality pub business and strong brands represent an excellent geographic fit with W&DB's existing operations.
"The deal will protect and develop Jennings’ heritage within a far larger and stronger group."
The deal has been attacked by Camra, which has urged Jennings’ shareholders to reject the bid on the grounds that Wolves could close the group’s brewery.
Mike Benner, Camra's chief executive said: "W&DB's promises to keep Jennings Brewery open, however genuine, are no guarantee. In 1999 W&DB acquired Mansfield Brewery and closed it within two years."
The news came as Jennings reported preliminary normalised pre-tax profits for the year to 26 February up 13.2% to £3.23m.
The company’s pubs business, which contributes 67% of turnover, saw like-for-like turnover rise by 3.1% and operating income by 6.9% based on the 110 pubs which traded throughout the comparative period.
Total turnover increased by 7.8% to £12.17m, with operating profit up by 13.2% to £6.10m, representing a margin of 50.1%. The average profit per pub, before overheads, increased by 9.4%.
At the year-end, the estate comprised 128 leased and tenanted pubs in Northern England, of which 43% are located in Cumbria, 24% in other parts of the North West, and 33% in the North East and Yorkshire.
Seven pubs were bought during the period, costing £3.8m, while five were sold, at a profit of £220,000.
Of the group's pubs, 91% are now on Jennings leases with an average period of 15 years.
The drinks division saw turnover up by 4.9% in the second half of the year after a 1.6% drop in the first half, producing an increase for the year of 1.3%, which generated an operating profit of £1m.
During the year the brewery produced almost nine million pints of beer and sales of Jennings' lead brand, Cumberland Ale, increased by 4% to four million pints, representing 46% of total brewery production output.
Rudgard said: "These results reinforce our decision to focus on the operation of leased pubs and the drinks business, which has created substantial additional value for shareholders."
