Marston rejects pounds 262m Wolves bid
Friday 27 November 1998
The bid, which Marston immediately rejected as unwelcome, comes after several unsuccessful attempts by Wolverhampton to agree a friendly merger between the two companies.
The move is a last-ditch attempt to stop Marston from selling most of its tenanted pub estate to Nomura, the Japanese bank, in a deal which would see pounds 60m returned to shareholders. Last night, Marston - best known for brewing Pedigree bitter and its Pitcher & Piano pub chain - said it was considering returning even more cash to shareholders.
David Thompson, Wolverhampton's chief executive, said: "They are selling their best-performing asset and investing in that part of the business where returns are falling."
Marston shareholders will vote on the disposal on 9 December. Yesterday, Wolverhampton warned that its bid would only go ahead if the Nomura deal was rejected.
Advisers to Marston said Wolverhampton was trying to bully shareholders into accepting its bid. "How can you have a proper debate about this in such a short time?" one said. "Shareholders are being bounced and it should not be allowed."
News of the bid sent shares in Marston soaring 41p to 287.5p - just ahead of the 283.3p being offered by Wolverhampton. Since speculation started over Wolverhampton's interest, Marston shares have risen by 67 per cent.
Industry experts doubted whether the offer would be enough.
"Wolverhampton will have to increase their offer. Their case is not terribly strong," one leading analyst said, adding that a 320p offer would be more reasonable. Marston pointed out that its net assets are currently worth 343p per share.
However, experts questioned Wolverhampton's ability to raise its bid much further. The company, which is offering 182p in cash and 0.235 new Wolverhampton shares for each Marston share, will already be financially stretched by the deal with balance sheet gearing rising to 85 per cent.
One possibility would be for Wolverhampton to offload the Pitcher & Piano chain of pubs. Mr Thompson yesterday questioned the chain's identity and Marston's decision to expand it at a time when other chains were cutting back on investment in high street pubs.
Mr Thompson said the geographical fit between Wolverhampton and Marston was compelling. "We believe the long-term consolidation of the brewing industry is sensible," he said, adding that the company had identified pounds 12m of cost savings if the two companies were merged.
These include closing one of the two head offices, combining distribution and sales forces, and merging computer systems - a move that would lead to the loss of at least 250 jobs. However, Wolverhampton stressed that Marston's brewery in Burton would be kept open.
Wolverhampton said it had tried to agree a friendly merger with Marston. But the most recent round of talks broke down on 16 November.
"We were willing to make concessions on the head office and the chairmanship, but they were not interested," Mr Thompson said.
- 2 Qataris pledge to expand Canary Wharf
- 3 #JeSuisEd: People share photos of themselves eating awkwardly in solidarity with Labour leader
- 4 Women think Irish men are the sexiest, survey finds
- 5 Florida couple forced to register as sex offenders for having sex on public beach
#JeSuisEd: People share photos of themselves eating awkwardly in solidarity with Labour leader
Florida couple forced to register as sex offenders for having sex on public beach
UK election candidates: 'Nasty party' Ukip faces fresh questions on eve of vote
Who should I vote for in the general election? Take The Independent's interactive quiz to find out which party's the right choice for you
Ohio 'Shawshank Redemption' fugitive Frank Freshwater arrested after 56 years on the run
In defence of liberal democracy
General Election 2015: Post-election 'shambles' looms as 70 per cent of voters say SNP 'should not be able to veto UK government policies'
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
General election live: Booths open at 7am across the country on polling day
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...
£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...