If forced to defend against the bid, Unicorn, owner of the Newt and Cucumber pub chain, could face costs of up to pounds 500,000, far more than the pounds 434,000 in pre-tax profits it made last year.
However, it seems likely that Norwich Union, the largest shareholder with 27 per cent, will back management, which holds another 24 per cent, to effectively block the takeover without an expensive battle for the hearts and minds of small investors.
Insiders suggest that other pub groups may also be interested in picking up Unicorn, which could lead to a bidding battle if Regent, headed by managing director David Franks, a descendant of the Franks family that helped to establish the Chef & Brewer pub chain, is prepared to raise its offer.
Regent - which would also find a full-blown fight hard to stomach as its unaudited results for the six months to 31 December, 1994 showed profits of just pounds 2.1m - launched its attack on Friday in an offer document that described Unicorn's trading history as "erratic".
In the five years to August 1994, the smaller company did not pay any dividends and had to undertake a capital organisation last September, wiping out the arrears on its preference shares and allowing it to pay a 1p dividend on ordinary shares at year end.
Unicorn's management is expected to wait the full 14 days allowed before responding to Regent's offer document as itappointed a new financial adviser, the British Linen Bank, only on Wednesday. Its previous adviser, Greig Middleton, resigned when the bid was announced because it also work- ed for Regent.
Unicorn was launched in 1986, backed largely by supporters of the Campaign for Real Ale (Camra) pressure group under the Business Expansion Scheme. It has 13 pubs scattered from Swansea to Norwich but none in London. Regent has 53, almost all of them inside the M25.Reuse content