Old English Inns shares rise 24% on bid talks

Shares in the pubs operator Old English Inns soared yesterday when the company said it was in takeover talks. The shares rose 24 per cent to 124.5m, putting a value of £49m on the group.

Speculation centred on Robert Breare, the leisure entrepreneur who made an indicative approach for Wolverhampton & Dudley last year. There was also talk of a possible management buy-out.

Old English Inns declined to identify its suitor, saying only that it was "in preliminary discussions which may or may not lead to an offer being made for the company."

Old English Inns has 146 pubs, which are typically in rural areas and offer accommodation as well food and drink. The group has gradually been rebuilding its fortunes after the troubled acquisition of a number of pubs in early 1999. New management has been brought in and they have invested in a central reservations system. However, trading has been hit by the floods of last autumn and the foot-and-mouth crisis, which affected Old English's rural sites.

In July Old English Inns reported that its total sales in the 13 weeks to July grew 3.7 per cent in difficult conditions. Last year the group recorded pre-tax losses of £3.2m after exceptional charges and interest costs. In April the group sold 22 inns.