W&D to use defence fund for acquisitions

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Wolverhampton & Dudley Breweries, the 1,600-strong pubs group, said yesterday it was pursuing new acquisitions in preference to returning the last £70m from the capital it promised shareholders as part of its defence against a hostile bid in 2001.

The group, which is widely believed to be looking at Eldridge Pope, the Dorset-based brewer that has received a bid, also hopes it could pick up some unwanted sites from the purchaser of Scottish & Newcastle's pubs estate.

Ralph Findlay, the chief executive, said W&D could refinance its pubs estate if it had to raise extra capital for a big acquisition, but would return more cash to shareholders if it cannot find deals at the right price.

"What we said at the time [of the bid from Pubmaster] was that we would return 'up to £200m'. Capital return is still top of our agenda, but the pubs market is in a period of significant reconstruction that may present opportunities which are more attractive than returning cash to shareholders."

Mr Findlay was speaking as W&D unveiled solid interim results, showing lower profits of £26.7m in the six months to the end of March, compared with £27.8m in the same period a year earlier. Earnings per share were up 15 per cent because of share cancellations in the meantime.

W&D shares rose 32.5p to 646p on news that sales picked up in March and April thanks to the good weather.