Greenalls shares jump on bid hopes

SHARES IN Greenalls, the ailing pubs and hotels group, jumped yesterday on speculation that the firm could be a prime takeover target for Whitbread, the company that lost out to Punch in the bid for Allied Domecq's pub estate. Greenalls' shares yesterday closed at 347.5p, up 5.5 per cent.

On Tuesday, Greenalls issued the latest in a series of profit warnings prompted by the poor performance of the group's Taverns wholesaling division and problems with the company's financial and operating system. In May, the company reported a 23 per cent fall in profits before tax for the six months to 23 March to pounds 50.5m.

A Whitbread spokesman refused to comment on his company's alleged interest in Greenalls, once Britain's biggest regional brewer and owner of the De Vere hotel chain and Village leisure operation. He said: "There was talk of Whitbread putting in a bid for Greenalls before the Allied Domecq sale. It was speculation then and it is speculation now."

Other possible candidates to buy Greenalls are Scottish & Newcastle, said to have considered purchasing the company's pub division earlier this year but to have walked away on price; the venture capital group Alchemy; and pub group Wolverhampton & Dudley.