Punch sets pub quiz for Whitbread board

HUGH OSMOND, the 36-year-old entrepreneur leading Punch Tavern's bid for Allied Domecq's 3,500 pubs, fired off 10 questions at rival bidders Whitbread yesterday. Mr Osmond is angry following the Allied board's decision last week to recommend Whitbread's cash-and-shares bid of pounds 2.874bn, lower than Punch's all-cash bid.

The Punch chairman wants to know: 1) Why does Whitbread believe that its offer, valued at pounds 2.874bn, is worth more than Punch's offer, worth pounds 3.008bn, including the value of the Bass dividend and Bass share option?

2) Is it true that Whitbread would demerge its brewing interests to meet regulatory requirements? If so, at what value?

3) How does Whitbread explain the 26 per cent decline in its share price relative to the FTSE 100 between 2 June 1997 when David Thomas was appointed as chief executive and 12 January 1999 when Whitbread made its trading statement?

4) What is Whitbread's core strategy? Last September it said it would focus on hotels and leisure and less on pubs. Now it wants to buy Allied Domecq's entire pub estate.

5) Is it true that Whitbread has asked its retailing employees to reapply for their jobs?

6) Is it true that Allied Domecq has extracted the best price Whitbread could pay? If so, how could Whitbread's shares be recommended as a good investment to Allied shareholders?

7) Will the Punch cash offer or the Whitbread cash and shares offer provide the best protection against a market crash?

8) Which core brands has Whitbread developed itself?

9) How does Whitbread explain the 3.9 per cent decline in sales in its food outlets in 1998/9 when rival Pizza Express has increased sales by 8.7 per cent?

10) What is Whitbread's cost of capital? (Punch estimates 8.5 to 9 per cent). What rate of return does Whitbread expect on its proposed acquisition? (Punch estimates 7.3 to 7.7 per cent). When would the acquisition become EVA (Economic Value Added) positive for Whitbread?

Mr Osmond says shareholders should be told the answers.

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