Botts tries to win over Wolverhampton & Dudley shareholders

Botts & Company, the private equity group which is stalking Wolverhampton & Dudley Breweries, yesterday set out to persuade W&D's shareholders to back its bid.

Botts & Company, the private equity group which is stalking Wolverhampton & Dudley Breweries, yesterday set out to persuade W&D's shareholders to back its bid.

In its statement, Botts confirmed it was interested in making an all-cash offer at a price of 500p a share, with scope to increase this price "subject to the outcome of due diligence". Botts, which is working with Robert Breare, the leisure entrepreneur, made a surprise approach to the pubs and breweries group last week. After agreeing to "tentative" talks, the W&D board rejected Botts' indicative offer, claiming it was "too uncertain" and that it undervalued the business.

According to Botts's statement, the possibility of a "substantial" increase to its offer was raised with the W&D management at last week's meeting. In addition, the group claims, its approach could not be described as "uncertain" since it has already received written indications of support from financial backers including Bank of Scotland, Donaldson, Lufkin & Jenrette and Merrill Lynch.

David Thompson, managing director of W&D, said yesterday: "We have made our position clear and have nothing further to add." The company has consistently maintained that the Botts proposal was subject to "too many conditions".

According to Botts this included a request for "a brief period" of exclusivity and for W&D to pay an undisclosed break fee if an offer was agreed and subsequently failed.

W&D shares closed down 12.5p at 459p. One analyst said: "They [Botts and Mr Breare] are obviously trying to put their case to W&D shareholders ... The statement seems a little bit weak I'm not surprised the shares have actually eased slightly on the back of it." Botts said it would continue to pursue a friendly agreement with W&D and would "remain available to enter into serious discussions".

There has been speculation that W&D could become a bid target since May, when it unveiled a slump in operating margins caused by over-aggressive price discounting.