Wolverhampton considers £46m Jennings takeover

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The Independent Online

Wolverhampton & Dudley, the regional brewer and pub owner, is planning to stage a £46m takeover of Jennings Brothers, the Lake District ale producer.

Wolverhampton & Dudley, the regional brewer and pub owner, is planning to stage a £46m takeover of Jennings Brothers, the Lake District ale producer.

The Midlands brewer, behind Marston's Pedigree ale and Pitcher & Piano bars, said yesterday it was considering a 430p-a-share offer for Jennings. As part of the deal, it has promised to continue using Jennings' historic brewery in Cockermouth in the Lake District, which has produced beers such as Cumberland Ale, Cocker Hoop, Crag Rat and Cross Buttock for nearly 180 years.

Ralph Findlay, the chief executive of Wolves, said: "Jennings is known as the Lakeland brewer. That heritage is very important to customers.

"We believe that our proposals will assist in the further development of the Jennings business and provide good opportunities for its lessees, beer brands and for its employees." He vowed to do as much as possible to safeguard the 100 jobs at Jennings' brewery and head office.

Mr Findlay said it was Jennings' pub estate of 128 properties in northern England that was of primary importance to Wolves. "It has been of interest to us for a while. Jennings has a very attractive freehold property estate and geographically it is ideal as it fits adjacent to our heartland," he said. "These pubs would give us extra reach in the North. We can offer licensees a wider range of products and we can promote Jennings brands better."

Wolves operates a 2,000-strong estate of managed and leased pubs, which it has built up through a number of acquisitions. In January it completed the purchase of Burtonwood, which owns more than 460 pubs in the North-west, for £155m. Of Jennings' pubs, 43 per cent are situated in Cumbria, a third in the North-east and Yorkshire, and only a quarter in the North-west.

The 430p-a-share offer represents a 32 per cent premium to Jennings' share price on Friday. Shares in Jennings soared 28 per cent yesterday, before closing up 11p at 1,141p. Wolves has secured irrevocable backing from Jennings' major shareholder, Frederic Robinson, a rival brewer based in Stockport. It owns more than 24 per cent of Jennings, and has been a shareholder in the company for 20 years.

Mike Clayton, the managing director of Jennings, said: "Wolves has said it does recognise the local appeal of Jennings' brands and continuing our Lake District operations is key to the business. Subject to Wolves meeting final terms, we believe it will make a good home for Jennings."

Analysts were more sceptical about the possibility of the takeover. Nigel Parson, of Williams de Bröe, said the price that Wolves was prepared to pay was high given that it would not achieve huge cost savings. "Our initial reaction to the price is that it is expensive. A commitment to the Jennings brewery could reduce synergy opportunities.

But Mr Parson added: "Nevertheless, it is not a big deal for Wolves - it is a bolt-on acquisition in line with its strategy."