W&D shares fall as Botts offer is rejected

Wolverhampton & Dudley, the UK's biggest regional brewer, yesterday rejected a takeover approach from Botts & Company, a private equity firm, claiming that the offer undervalued the business and was "too uncertain".

Wolverhampton & Dudley, the UK's biggest regional brewer, yesterday rejected a takeover approach from Botts & Company, a private equity firm, claiming that the offer undervalued the business and was "too uncertain".

Botts, whose bid is being fronted by Robert Breare, the leisure entrepreneur, is understood to have offered more than 500p a share on Wednesday, valuing the struggling breweries and managed pubs group at more than £470m. A Botts spokeswoman said the firm still hoped to pursue a friendly deal and was attempting to re-establish contact with W&D management. But it complained that W&D had so far refused to allow the investment group sufficient access to its books. W&D shares closed down 31.5p at 451p.

Ralph Findlay, W&D's finance director and chief executive designate, said: "The proposals we received were conditional in a number of respects.... The central essence of it is we met the chap [Mr Breare], we listened to him and having done so, we are not pursuing that further because we didn't think the proposals were financially sound."

Mr Findlay would not comment on the rumoured level of the proposal or on speculation that W&D's management could mount a rival bid to take the group private. Asked whether the company would fight to retain its independence, Mr Findlay said: "We didn't put the business up for sale. We have had a proposal and we have rejected it."

The Botts spokeswoman said: "We think it's pretty rich to claim that it is not in the interests of W&D shareholders to let us go in and look at the books." She said the reason that the approach was made on a conditional basis was that Botts had not been allowed to conduct due diligence on the proposed deal.

Analysts were divided on whether W&D had acted wisely. One said: "It looks as though the whole thing was turned down rather quickly. If Botts offered more than 500p, it was a reasonable offer."

But another questioned the seriousness of Botts' interest. He said: "It could be a bit of a spoof.... The way to create value from this business is to break it up and sell off the assets."