Allied Domecq rejects Punch's pounds 2.7bn offer

PUNCH TAVERNS, the privately controlled pubs group, is to take its pounds 2.7bn offer for Allied Domecq's pub estate direct to Allied's shareholders after the Allied board rejected its offer as "insufficiently attractive" and backed the rival bid from Whitbread instead.

Hugh Osmond, the chairman of Punch Taverns, came out fighting, saying: "Allied has decided not to put this offer in front of shareholders so we will do it for them."

He was speaking after the Allied board said it had decided not to recommend the Punch bid because it had "concerns relating to certain timing, tax, warranty and finance aspects" of the proposal. The company urged its shareholders to vote in favour of the pounds 2.5bn Whitbread all-share offer.

Allied Domecq said it had been "so advised" of this course of action by its advisers Goldman Sachs. But in a curiously worded statement Goldman placed the onus on the Allied directors. "In providing its advice Goldman Sachs International has placed reliance on the Allied Domecq directors' commercial assessment of the proposals," it said.

Sir Christopher Hogg, Allied's chairman defended his board's decision saying: "The cash offer from Punch didn't give our shareholders a stake in the business going forward." He said he felt there were still "some imponderables" regarding the potential tax liability of a cash bid. However, he paid tribute to Mr Osmond's determination. "He's done an astonishing job. You've got to hand it to him. His offer merited serious consideration and received it."

Though the headline figure of Punch's pounds 2.7bn cash bid was clearly higher than Whitbread's pounds 2.5bn offer, the Allied decision was based on the value to Allied shareholders of having an stake in Whitbread going forward and access to the proposed synergy benefits. Many analysts are saying that the final value of the Whitbread deal would be in the region of pounds 3bn. "The gap is just too much," an Allied spokesman said. But Punch countered: "Anyone who thinks all the synergy benefits will flow to Allied shareholders needs to go back to school."

Punch will now have until 2 July to press its case before Allied's shareholders vote on the Whitbread deal. Punch Taverns pointed out that Allied requires a 75 per cent majority to approve the deal. "They are running the risk of failure," a spokesman said.

Key shareholders in Allied include Phillips & Drew, which holds 11 per cent, and the Suntory group, which holds 3.6 per cent.

Punch Taverns has run a high profile and aggressive campaign to try to win control of Allied's pub estate. Its deal was part funded by a deal with Bass under which the Carling Black Label brewer would have paid pounds 1bn for some of Allied's best managed houses.

Whitbread's shares closed 19.5p higher at 1070p, though the Allied statement was not issued until after the stock market had closed.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
Arts and Entertainment
tvThe C-Word, TV review
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Arts and Entertainment
Haunted looks: Matthew Macfadyen and Timothy Spall star in ‘The Enfield Haunting’
tvThe Enfield Haunting, TV review
The Mattehorn stands reflected in Leisee lake near Sunnegga station on June 30, 2013 near Zermatt, Switzerland
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living