Wolverhampton and Dudley Breweries will unveil its defence against Pubmaster's hostile bid early this week, basing it on the group's value and its improving trading prospects.
Wolves is likely to say Pubmaster's 480p a share bid undervalues the brewer and pub owner, which has shown better trading over the past 12 months, and falls short of Pubmaster's earlier indicative bid of 510p to 515p, industry sources said.
Under takeover rules, Wolves has until day 14 of the bid process, or Thursday, June 28, to submit its defence document to argue against the £453m hostile bid within the UK's 60-day takeover timetable.
Many observers believe Pubmaster will only win the battle if it raises its bid well above 500p. Leading shareholders, which include the American fund Silchester with 11.3%, Britannic with 7.2%, another American fund, Tweedy Browne, with 5.5%, and M&G with 5.1%, are looking for an increased bid of around 520p, oit is said.
Philip Graves, a fund manager at Britannic, said: "A bid at 480p really is not in the right ball park, we would look for something well above 500p."
However, analysts say the market is not convinced Pubmaster can come up with a much bigger bid.
Pubmaster plans to sell 290 of Wolves' biggest pubs to Robert Breare for £250m if its bid is successful, and put the four Wolves breweries up for sale.
Analysts believe the brewing side, which made an operating profit of £20.3m in its last financial year, could raise £60m.
Wolves is likely to say Pubmaster's 480p a share bid undervalues the brewer and pub owner, which has shown better trading over the past 12 months, and falls short of Pubmaster's earlier indicative bid of 510p to 515p, industry sources said.
Under takeover rules, Wolves has until day 14 of the bid process, or Thursday, June 28, to submit its defence document to argue against the £453m hostile bid within the UK's 60-day takeover timetable.
Many observers believe Pubmaster will only win the battle if it raises its bid well above 500p. Leading shareholders, which include the American fund Silchester with 11.3%, Britannic with 7.2%, another American fund, Tweedy Browne, with 5.5%, and M&G with 5.1%, are looking for an increased bid of around 520p, oit is said.
Philip Graves, a fund manager at Britannic, said: "A bid at 480p really is not in the right ball park, we would look for something well above 500p."
However, analysts say the market is not convinced Pubmaster can come up with a much bigger bid.
Pubmaster plans to sell 290 of Wolves' biggest pubs to Robert Breare for £250m if its bid is successful, and put the four Wolves breweries up for sale.
Analysts believe the brewing side, which made an operating profit of £20.3m in its last financial year, could raise £60m.
