Century executives were suddenly faced with the certainty of being unseated, just hours after the announcement of the paper bid, which offers 0.3942 new shares in Enterprise for every share in Century.
The takeover will mean the departure of Century's executives and the closure of its head office, which employs fewer than 40 people. Enterprise said it would "generally keep all the people running their pubs".
Sources at Enterprise said the bid was a shareholder initiative, led by nine institutions who wanted to see the creation of a pub-owning giant. "We were not interested in a long, drawn-out battle and we made it very clear we would proceed only with their support," the source said.
By this morning, when Century executives learnt of the bid, Enterprise already had undertakings or statements of intent in respect of 44.8 per cent of the company. By 3pm the offer, which values Century at 147p a share, went unconditional.
Yesterday, Century at first said it was considering the offer and promised a statement. By the afternoon it said it would have to delay publishing a statement until today.
In January, institutional shareholders contacted Ted Tuppen, chief executive of Enterprise, after rumours emerged about a deal with Inn Business, another rival. Led by Morgan Grenfell Asset Management, M&G, Scottish Equitable and Norwich Union, the shareholders said they would prefer a takeover of Century. They added that there was more than 50 per cent support.
Enterprise and Century floated in 1995 as separate companies. Both held pubs formerly owned by Bass, but Enterprise ran all its pubs as tenancies rather than the managed houses favoured by Century.
Analysts said that Century, led by Alistair Arkley, had not been helped by its disappointing share-price performance. According to Enterprise, the total shareholder return on pounds 100 invested in Enterprise on flotation was now pounds 327, as against pounds 120 for an investment in Century.
"Whether the board accepts is immaterial now. Unfortunately, companies can end up being run by institutional shareholders and in this case, they want a faster-growing company, which Enterprise is," said one.
Shares in Century closed yesterday at 141.5p, up from 115p. Shares in Enterprise closed down 7p at 373.5p.Reuse content