Punch makes a `refreshed' bid for Allied Domecq pubs

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The Independent Online
PUNCH TAVERNS yesterday made a new pounds 2,925bn offer for the 3,600 Allied Domecq pub estate and said it would address every issue the Allied board had raised when it decided to back the lower Whitbread offer.

Hugh Osmond, chairman of Punch, said he would write to shareholders tomorrow outlining the changes in the "refreshed" bid, which will not increase in value but will be structured differently.

"We are going to renew our offer," Mr Osmond said.

"The changes we're most likely to address are the spurious concerns they mentioned and, in particular, points relating to our financing," he added.

It is expected that Morgan Stanley will take the lead in financing the deal, which is currently funded jointly by seven parties including Texas Pacific Fund, the US venture capitalists.

However, confusion remained over the potential for warranty claims which Punch could make against Allied Domecq if it won the bid.

Sources close to Whitbread indicated that this was the sticking point and one of the key issues behind Monday's decision to back Whitbread.

"We felt we risked a greater level of warranty and indemnity claims under the Punch proposal," the source said.

Philip Bowman, finance director at Allied Domecq, said the board would look at a new offer from Punch.

"The board will consider any new offer which comes in. It was a very long process on Monday," he said.

But Mr Osmond said that although Punch wished to match Whitbread's offer as far as the potential for warranty claims was concerned, the Allied board had kept the details of its agreement with Whitbread secret, denying Punch the chance to ensure that it did not lay Allied open to higher claims.

"We'll enter into the same contract as Whitbread if they let us," Mr Osmond said.

Shares in Whitbread were down 4p at 985p, Allied Domecq closed down 7p at 600p but Bass was up 4p at 943p.

Mr Osmond claimed last night that market reaction once again showed support for the Punch deal.