Greene King criticises Morland's defence

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The Independent Online
GREENE KING, the East Anglian brewer trying to take over Morland, its Oxfordshire-based rival, has complained about the tactics being used by its target in its defence campaign.

Greene King said that Morland, which employs SG Warburg as its main financial adviser, has been heavyhanded in the way it has tried to persuade small shareholders to reject the pounds 103m hostile bid.

Warburg has been keeping a regular check on Morland shareholders by issuing notices under section 212 of the Companies Act. Greene King's chairman, Simon Redman, believes it is the first time these powers have been used at this stage of a hostile bid.

Greene King has complained to the Takeover Panel, but without success. Mr Redman said: 'I think the whole issue ought to be looked at once things have calmed down.'

A spokesman for Warburg said: 'This is absolute nonsense. There is no question of us employing dirty tricks.'

Greene King's bid will close tomorrow. Yesterday's accusations came after a number of acceptances had been withdrawn.

Greene King launched the bid, which is pitched at about 480p in convertible preference shares and 450p in cash, with promises of support from Whitbread Investment Trust and its 43.5 per cent stake.

However, early belief that Greene King would win easily were quashed when Royal Insurance, with a 7 per cent stake in Morland, said it would reject the offer. Acceptances for the bid reached 47.2 per cent 10 days ago, but support for Greene King has since fallen back to 46 per cent.

Warburg has written to all shareholders who had accepted, asking them to reconsider, and has followed up with telephone calls.

However, Warburg said this kind of activity was normal practice at this stage of a bid as closely fought as this one.

Robert Fleming, another adviser to Greene King, has also admitted contacting small shareholders by telephone.

Separate sources on both sides of the dispute have claimed that pensioner shareholders have been upset by the tactics being used.

They said that shareholders had complained that they have been 'pestered' in person or by repeated telephone calls in connection with the dispute.

The bulk of the 1.2 per cent of withdrawals came from a single institutional shareholder. Mr Redman said yesterday that Greene King is negotiating to buy part of that stake.