Investors force Marston to delay pub deal

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The Independent Online
MARSTON, THOMPSON & Evershed, the regional brewer facing a pounds 262m hostile bid from Wolverhampton & Dudley, was yesterday forced into an embarrassing climbdown over the proposed securitisation of its tenanted pub estate.

The company has been forced to adjourn an emergency meeting scheduled for this morning after its major institutional shareholders said they would vote down the management's plans if the meeting was not put back.

Institutions have been calling for more time to consider the offer from Wolves, which had made its offer conditional on the securitisation being rejected. The delay will cost Marston pounds 6m in fees already agreed.

This includes pounds 2.5m in fees to Nomura, the Japanese bank, and other advisers for arranging the securitisation, pounds 1.6m in hedging costs, pounds 600,000 in credit rating costs and pounds 1.6m for tax and legal advice. Any new deal would cost a similar amount.

The total figure could rise to pounds 10m if the securitisation is abandoned completely. Some shareholders have been outraged that Marston agreed such high up-front payments.

Marston insisted yesterday that it was not performing a U-turn even though it said only days ago that it would be too costly to delay the securitisation plan.

In a statement the company said it still "firmly believes" in the plan but recognised that shareholders had strongly indicated a preference to allow the full bid timetable to run its course.

Wolverhampton & Dudley said it "welcomed" the decision. "We continue to believe that our offer is more attractive than their proposals."

However, many shareholders believe the offer is too low and that either Wolves will be forced to raise its 279p per share offer or risk a white knight bidder entering the fray.

Greene King, the Abbot ale brewing and pub group, is known to be monitoring the situation.

Marston shares closed a penny lower at 290p. Wolves shares closed at 425p.

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