David Bonderman, the chairman of Texas Pacific Group, Punch's biggest financial backer, has flown to London to oversee the increasingly fraught bid battle for Allied's 3,600 pubs and its off-licence and soft drinks businesses.
"We are in this to win and our first shot is not our best shot. We don't put our best foot forward first," said a spokesman for Texas Pacific, which owns 70 per cent of Punch and is providing the bulk of equity backing for its pounds 2.7bn cash offer.
Whitbread executives were locked in meetings yesterday debating whether to boost their offer of 230 million shares with a cash element. There was speculation last night that Whitbread might raise its bid by way of a share offer underwritten with cash in order to avoid any tax liability.
David Thomas, Whitbread's chief executive, will face tough questions from shareholders at the group's annual general meeting today concerned at public remarks made last week, when the group suggested it would walk away from any bidding war for Allied. Pressure on Mr Thomas increased yesterday when the City marked down Allied's shares from 1038p to 1029p. The mark-down reflects continuing uncertainty about the deal, in spite of Allied Domecq's recommendation. The value of Whitbread's offer yesterday evening was pounds 2.37bn.
Independent analysts yesterday said they expected Whitbread to return to the fray today, topping up its paper offer with at least pounds 400m. "Punch would then have to bid at least pounds 200m higher to have a chance of beating it," said one.
A higher offer from Whitbread would introduce further uncertainty for Allied Domecq, because Whitbread must give its own shareholders 21 days to approve a fresh offer. Allied Domecq shareholders must vote on Whitbread's offer at an egm this Friday.
Outlook, page 17