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Punch gets tax clearance for pounds 2.7bn Allied bid

PUNCH TAVERNS, the privately owned pub group, last night claimed it had won an important battle in the war with Whitbread over Allied Domecq's pub estate after its pounds 2.7bn cash offer was cleared by the tax authorities. The decision by the Inland Revenue means that Allied Domecq shareholders will not have to pay capital gains or corporation tax if they accept Punch's offer for the 3,600 pubs.

Punch claimed that the tax clearance for its bid - which is backed by the pub and hotels giant Bass - is a blow for Whitbread's all-share offer. The leisure giant had argued that tax charges would slash the value of the Punch offer and urged investors to accept its own pounds 2.38bn bid, which has been recommended by the Allied board.

The news comes six days before Allied shareholders are due to vote on the Whitbread offer at an egm. Punch yesterday launched a pounds 1m publicity blitz, calling for the vote to be delayed until Whitbread has clearance from the Office of Fair Trading.

Whitbread needs a 75 per cent majority to separate the Allied pubs from its drinks business and at least 50 per cent of the votes to take over the estate.