Marston shares began moving up on Tuesday, forcing W&D to make a statement under Takeover Panel rules. The shares rose a further 32.5p to 231p yesterday, valuing the company at pounds 210m, but no bid materialised.
City analysts said yesterday a successful bid would have to be pitched at around 275p and doubted whether W&D has the resources for a hostile bid. Its own shares have fallen 27 per cent from their peak earlier this year, they were unchanged at 419p yesterday, and its market capitalisation is down to pounds 213m.
An agreed merger or rationalisation of the two companies' breweries and pub chains could make more sense. The regional brewers are roughly equal in market value, they have reciprocal trading arrangements and they jointly owned Mercury Taverns, a 141-pub chain sold to Pubmaster for pounds 35m in June.
Both companies have struggled to cope with the competitive pressures from the major national brewers and the new breed of pub companies that buy their beer requirements on the wholesale market.
Marston revamped its top management earlier this year when Nick Letchet stepped up from finance director to chief executive and brought in Mike Thompson from Bass Leisure as his replacement in June.
A plan to raise up to pounds 135m to invest in its 260 managed houses and extend the Pitcher & Piano chain of theme pubs by turning over the rental income from its 600 tenanted pubs to investment clients of Japanese investment house Nomura is still awaiting signature.
W&D acquired Cameron's brewery in Hartlepool from Brent Walker in 1992 and has been gradually turning a quarter of its 1,000-strong chain of pubs into concept bars catering for half-a-dozen specialised markets. A deal would put question marks on the future of both companies' breweries and many of its pubs.