Morland steps in to buy Unicorn for pounds 12.3m

MAGNUS GRIMOND

Morland, the Abingdon-based brewer famous for its Old Speckled Hen ale, has stepped in as a white knight for Unicorn Inns, the "Newt & Cucumber" pub group under siege from its rival Regent Inns.

Morland has stitched up an agreed pounds 12.3m deal to buy Unicorn and said yesterday it was at an advanced stage in talks for another retail acquisition, which it expects to announce within a fortnight. Shareholders are being called on for pounds 19.9m in a one-for-five rights issue at 465p to finance the deals.

Morland's chief executive, Michael Watts, denied speculation that the company was set to buy Surrey Free Inns, a pub group quoted on the Alternative Investment Market, but he said the deal would involve managed pubs in an adjacent geographical area and suggested further moves could follow.

Morland's shares fell 5p to 545p, while those of Regent Inns also slipped 5p to 475p as the company said it would allow its pounds 8.1m offer to lapse. Morland has tied up irrevocable undertakings for its offer from the owners of 51.7 per cent of Unicorn's shares.

Morland said improving the quality and size of its managed retail pubs had been a strategic priority in recent years. Expansion of its managed estate has been spearheaded by the Artist's Fare food chain, aimed at the older drinker. Unicorn will bring a new emphasis on high volume youth drinkers in city centres through the main Newt & Cucumber format, although the more genteel Wig & Pen concept is designed to attract female custom.

Morland is offering four of its own shares for every five in Unicorn, with a 402p-a-share cash alternative. Mr Watts said the price being paid worked out at just under pounds 1m per managed pub.

Morland also forecast a final dividend of at least 8.3p for this year.

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