Fuller’s, the London-based brewer and pub operator, this morning announced that it has had two offers for Capital Pub Company rebuffed - one valued Capital at £53.9m. In an announcement from Fuller’s today, the brewer said it made an “indicative proposal to acquire the entire issued and to be issued share capital of Capital. The board of Capital has rejected this proposal and has declined to enter into discussions with Fuller’s.” Fuller’s original offer, made on 11 March, was 175p per share in Capital, which operates 34 pubs in the London area. A second offer on 26 April was 200p including any dividend paid thereafter - this was also rejected. The 200p offer valued the issued share capital of Capital at £53.9m, representing a premium of 29% to yesterday’s closing price. It also represents a premium of 53% to the share price immediately prior to an approach being made, and a premium of 35% to the average daily closing price over the previous three months. Fuller’s said: “Fuller’s is aware of Capital’s stated growth strategy which it believes will likely require further equity issuance. Fuller’s considers that there are considerable risks associated with the successful execution of this strategy that could dilute the overall quality and attractiveness of Capital’s estate and which could have a negative impact on valuation over time. “In contrast, any offer by Fuller’s of 200p per Capital share would provide Capital shareholders with the certainty of a cash exit in the near term at a substantial premium. Fuller’s is therefore disappointed that Capital’s board has declined to engage with it so far. “Fuller’s would like to work towards a recommended transaction and establish a constructive dialogue with Capital. Fuller’s believes that it is in the interests of Capital shareholders for the board of Capital to engage with Fuller’s in order to deliver an attractive cash offer in a timely manner.” Fuller’s said it reserves the right to make an offer on less favourable terms than those set out in its announcement today, either with the agreement and recommendation of the board of Capital, or under these circumstances: 1) Capital declares, pays or makes any dividend or distribution to Capital shareholders at any time, in which case there will be an equivalent reduction in Fuller’s offer price. This includes any declaration or payment of the potential dividend of at least 2.1p per Capital share referred to in Capital’s announcement of 18 April 2011. 2) There are more than 1,512,575 options outstanding, in which case there will be a reduction in Fuller’s offer price such that there is no change in the total consideration payable by Fuller’s pursuant to any offer. 3) The maximum dilutive effect of awards under the new management incentive plan (announced on 17 March 2011) is, in aggregate, greater than 13% of the issued share capital of Capital, in which case there will be a reduction in Fuller’s offer price such that there is no change in the total consideration payable by Fuller’s pursuant to any offer. At its full-year results last Friday, Fuller’s chairman Michael Turner said the company was “looking all the time” to make further acquisitions to the estate. He also said that any sizable estates in the sector that he admired had already been “taken out”. At the year end the company had £34.5m of undrawn committed funds through its new £100m bank facility that runs until May 2015. Douglas Jack at Numis said at the time: “Given Fullers’ sector leading LFL track record, scope to drive scale economies and successful record for integration, further pub acquisitions could lead to substantial out-performance.”