Whitbread sells regional stakes: Brewer may use 230m pounds for big acquisition

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MOST of the last remnants of Whitbread's protective umbrella for regional brewers and pub operators have been furled away for good via the sale of pounds 230m of investments in seven companies.

The move fuelled speculation that Whitbread would soon make a big acquisition. Sale proceeds will erase its small debts, and its equity has become a viable currency following last year's enfranchisement of the 'B' shares.

All the shares off-loaded yesterday were bought by BZW, the investment bank, at a 5 per cent discount to Wednesday's closing market prices.

BZW managed to place most of the shares with institutions, but some dealers said it was having problems finding homes for equity in Fuller, Smith & Turner, down 3p to 460p, and Greene King, which lost 11p to 518p.

A 20 per cent, pounds 70m stake in Boddington, down 9p to 286p, and a 7 per cent holding in Vaux Group, steady at 284p, were sold swiftly.

Royal Insurance, a large investor in the industry, is believed to have spent more than pounds 7m increasing its holdings in three brewers - Vaux, Greene King and Marston, Thomson & Evershed, off 7p to 290p.

A 12 per cent stake in Morland, the first company taken under the umbrella in 1955 and which survived a bid from Greene King in 1992, went quickly.

Morland, which saw its price ease 2p to 508p, said: 'We are delighted to have new shareholders, and also because it does not affect our trading relationship with Whitbread.'

A small stake of less than 3 per cent was also sold in Greenalls, which fell 6p to 436p.

Whitbread recently assumed direct control of the bulk of the stakes when it took over the Whitbread Investment Company. Legislation restricts the size of its stakes in individual companies to 15 per cent.

It had until May to reduce its holdings below 15 per cent. Whitbread still has 4.5 per cent of Joseph Holt, a 5.5 per cent stake in the HP Bulmer cider company, and holdings in two unquoted brewers, Brakspear and George Gale.

(Photograph omitted)