Greene King, which reported a 7 per cent increase in first-half profits yesterday, could emerge as a "White Knight" after Marston's emergency general meeting on 9 December where shareholders will vote on the planned pounds 137.5m securitisation of its tenanted pub estate.
Greene King's chief executive Tim Bridge would not be drawn on the subject yesterday: "We're fully aware of what is going on. Beyond that I can't comment."
But it is understood that Greene King's management is conscious that adding Marston's predominantly Midlands estate to its own southern-dominated portfolio would increase the geographic coverage of both groups more than a Wolves deal. Marston said that it is "open to strategic opportunities" and the company has impressed the City with the integration of the Magic Pub Company group, acquired in 1996.
The possibility of a bid battle emerged as Marstons raised the stakes in its bid defence by offering more cash to shareholders. It said shareholders willreceive pounds 110m via a share buy-back, up from the pounds 60m previously announced.
The buy-back, which is equivalent to 110p per share, will be funded from the pounds 137.5m to be received from the sale of its tenanted pub estate. The cash is conditional on the securitisation going through. Marston plans to use the remainder of the proceeds to invest in developing its managed estate, which includes the trendy Pitcher & Piano bars.
The raising of the buy-back was criticised by Wolves, which accused Marstons of "an inconsistent strategy". The Wolves offer is pitched at 280p per share. Yesterday Marston shares closed 0.5p higher at 297p. Wolves shares closed 2p higher at 427.5p.