Punch persuaded to return to table in Allied bid battle

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The Independent Online
THE BID battle for Allied Domecq's pub estate experienced another volatile session yesterday with Punch Taverns at one stage withdrawing its offer before being persuaded back to the negotiating table.

By close of play the two sides were still locked in meetings regarding Punch's pounds 2.7bn offer, which would include the 3,600 pubs and the off-licence business First Quench. "They are still talking. We would like a rapid conclusion," a Punch spokesman said.

The talks took the form of face-to-face meetings between Hugh Osmond, Punch's chairman, and Phillip Bowman, chief executive of Allied Domecq. The discussions, the first time the pair have met during the long running bid saga, began at 11am yesterday after a last minute glitch threatened to derail the deal altogether.

Punch initially withdrew its offer of pounds 2.7bn saying it had "not been taken seriously" by the Allied board. According to the Punch camp Allied's adviser, Goldman Sachs, had repeatedly stalled the talks on a series of minor points. Punch had been further angered by Allied's comments that it had received expression of interest from other potential bidders. These are thought to include Nomura, the Japanese securities firm which controls 5,000 pubs via a group of pub businesses including the Unique Pub Company. A source close to Unique Pub Company said: "We'd possibly be interested in parts of it."

Allied agreed to give the other bidders financial information on its pubs over the weekend if they signed confidentiality agreements. "This is an auction," an Allied spokesman said.

Analysts agreed that Allied's board had a duty to gain the best price for its pubs. But they said its handling of the sale process risked deterring all potential buyers. "It's all last minute posturing," one analyst said, who added that a Punch victory still seemed likely. Allied shares dipped to 559p on news that Punch had withdrawn its offer but recovered to 575p, up 1p on the day, as talks resumed.