Punch price deters rival Allied bidder

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The Independent Online
THE POSSIBILITY of a renewed bid battle for Allied Domecq's pub estate was in effect scotched yesterday when a potential rival consortium to Punch Taverns' pounds 2.75bn bid indicated that it was unlikely to beat the Punch price.

The rival consortium groups together Whitbread; Nomura International, the Japanese bank that controls 5,000 pubs; and Alchemy, the venture capital group. The consortium was one of two possible rival bidders which were shown details of the Allied pub estate last weekend.

It would have seen the group carve up the 3,550-strong Allied estate, with Whitbread taking about 500 and Nomura securitising the cash flow on a further 1,500. Another 2,000 would have been earmarked for sale.

However, it is understood that the consortium believes the asking price is too high and that it is unlikely to table a bid.

It is also understood that it was Allied Domecq which urged the consortium to take a look at the pubs. "They were certainly trying to drum up interest," a spokesman said.

The other interested party includes a Tasmanian brewery, which is not seen as having sufficient resources to mount a bid.

Punch Taverns, which won the backing of the Allied board with its revised pounds 2.75bn bid earlier this week, defended its ground yesterday.

"We will have to wait and see if this other bid is for real. But our bid offers certainty in funding and timing," a spokesman said. Punch added: "We could always bid again if need be. We are pretty determined to win this."

Whitbread was forced to withdraw its original bid after it was referred to the Competition Commission. However, industry experts point out that Whitbread's involvement in another consortium is still likely to require the company to sell its brewing interests, as it would breach the number of pubs it is allowed under the 1989 Beer Orders.

This would therefore raise the possibility of another regulatory problem.

Allied shares closed 9.5p lower at 557.5p.