As corporate miscalculations go, this one takes some beating, and though it might seem both vindicative and bad spirited of Hugh Osmond's Punch to reduce its alternative offer in response, it would be perfectly within its rights to do so. This is a no holds barred brawl being fought outside the normal rules of the Takeover Code. If Mr Osmond wanted to bring Sir Christopher Hogg and others on the Allied board crashing down on their swords, there would be no better way of doing it.
With time called on Whitbread, Punch is the only offer left on the table. It is also a venture capital backed bid, and as a consequence Mr Osmond is bound to play hard ball on the price. For choice he would prefer Sir Christopher's recommendation, but by the same token he will wonder how much this is worth, given how badly Allied has misjudged events so far. Unless he's feeling magnanimous in victory, Mr Osmond is certain to reduce his offer to some degree.
It took guts as well as a little cheek for the Allied board to stick with Whitbread and recommend an offer which on paper was obviously inferior, but if there were reasonable grounds for doing so, they were that the Punch bid was both more uncertain and would take longer to go through. Both justifications have proved groundless.
To be fair on Allied, few expected Stephen Byers, Secretary of State for Trade and Industry, to be as unequivocal in his decision to refer Whitbread to the Competition Commission as he was, least of all Punch. All the same, it seems extraordinary in an industry as prone to meddling by the competition authorities as the beerage, that both Whitbread and Allied could have been so oblivious to the regulatory risks.
Even after John Bridgeman, director general of fair trading, strode into the fight to declare that Whitbread's offer raised significant competition issues, directors continued to express confidence privately that the deal would sail through. Just how badly advised can you be?