Whitbread plans to trump Punch's Allied offer
Thursday 01 July 1999
In a stock exchange statement, Whitbread said it had held further talks with Allied Domecq and was "reviewing a range of options with a view to making an improved offer for Allied Domecq retailing."
After a day of frantic talks between the three parties, Allied Domecq also made a statement setting the stage for a formal auction between Punch and Whitbread.
It said legal objections to a Punch bid had been cleared up, and told shareholders it was adjourning a vote, scheduled for an egm on Friday, to approve the original Whitbread deal.
The City now expects Whitbread to make a higher offer today. Cash will be used to attract Allied shareholders, who are now increasingly sceptical of the value of Whitbread's all-share offer. Executives watched yesterday as the shares tumbled 3 per cent to 983p, devaluing its bid to pounds 2.27bn.
The fall was partly a response to an unprecedented statement from the Office of Fair Trading on Wednesday, which tore a strip off Whitbread for saying it had "not been made aware" by the OFT of any serious competition issues. Admitting this was a serious setback, Whitbread yesterday turned the focus on Clifford Chance, its legal advisers. The giant City law firm had given Whitbread feedback on the progress of its meetings with the OFT.
A higher offer would mark an about-face by Whitbread executives, who last week said they were not interested in getting involved in a bidding war.
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