Marston attacks W&D failure to deliver value

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REGIONAL BREWER Marston, Thompson & Evershed went on the offensive yesterday against the pounds 262m hostile bid from Wolverhampton & Dudley, describing the cash and share offer as "woeful".

After the embarrassment of last week when Marston's shareholders forced the company to postpone plans to securitise its tenanted pubs estate, Marston devoted its entire defence document to an attack on the W&D record.

It said 12 years of management under David Thompson had "demonstrably failed to maximise value for W&D shareholders". It claimed figures provide by W&D itself showed that the management had been "destroying value in all parts of their business".

Nick Letchet, Marston chief executive, said the W&D board "had vacillated on their strategy" and that the creation of a "super-regional brewer" would only give the combined company a market share of 3.1 per cent, insufficient against the power of Britain's big four brewers. He said he would not rule out a merger with another regional brewer, but said this would be based around beer brands and managed outlets, not tenanted estates.

W&D hit back by saying that Marston's document did nothing to advance the debate for industry consolidation. It said W&D had addressed its performance and reported a 10 per cent rise in earnings per share last year compared to an 8 per cent fall in earnings at Marston in the half to September. W&D claimed Marston's strategy was "in tatters" after it failed to gain shareholder support for its pounds 137m tenanted pubs securitisation, adding that Marston had not questioned its estimate that the merger would yield at least pounds 12m of cost savings.

W&D's offer consists of 182p in cash plus 0.235 W&D shares for every Marston share held. This values the bid at 282p per share. Marston shares closed unchanged at 298.5p.