Greene King humbled as Morland bid fails

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The Independent Online
GREENE KING, the regional brewer, has suffered a humiliating rejection of its pounds 100m takeover bid for Morland.

Greene King won acceptances from 45.9 per cent of Morland shareholders. However, it was backed by fewer than 2 per cent of independent shareholders.

Simon Redman, chairman of Greene King, said he was 'extremely disappointed'.

Jasper Clutterbuck, chief executive at Morland, said: 'I am absolutely delighted.'

Greene King's disppointment is compounded because some shareholders withdrew acceptances late in the bid. The final tally of 45.9 per cent is 1.3 percentage points lower than the peak, recorded two weeks ago, of 47.2 per cent.

When Greene King launched the offer in May it secured the support of the Whitbread Investment Company, an associate of the brewer, and its 43.5 per cent stake. WIC was obliged to reduce its stake to below 15 per cent to comply with the Government-inspired Beer Orders.

It sold the rest to Greene King, which bought shares in the market, lifting its total holding to 29.3 per cent.

Mr Redman suggested Greene King might use its near-30 per cent stake to re-bid when takeover rules allow it, in 12 months.

That prospect supported the share price yesterday, but shares still lost 41p to close at 420p. Before the bid Morland shares were trading at 325p.

Mr Redman said that the stake might be sold as one block 'if we find a buyer prepared to make a premium offer'.

The Greene King chairman was also unrepentant about the strategy of attack. Analysts have criticised the fact that Greene King made its first offer its final one, and that it was unexpectedly unable to publish its own financial results because of Takeover Rules.

Mr Redman, however, gave continued backing to Robert Fleming, his merchant bank and financial adviser.

Simon Barratt, of the WIC, gave no clues about tactics should another bid emerge. He said the 14.9 per cent holding in Morland would be treated 'as any other investment stake'.

WIC still holds 32 per cent of another regional brewer, Pedigree Marston, based in Burton. WIC has to reduce its stake in Marston to below 15 per cent as well.

Greene King shares slumped 40p yesterday to close at 467p. On Tuesday it is expected to announce pre-tax profit figures for the year to April.