Wolves offers £100m share buyback this year in bid defence

Wolverhampton & Dudley Breweries, the regional brewer in the throes of a £453m hostile bid from Pubmaster, yesterday strengthened its defences against the pub operator by promising to return £100m to shareholders by the end of December.

The fully underwritten share buyback, which will be made via a tender offer, depends on Wolves achieving £65m of disposals by the end of 2001. It is the first step in a strategic plan announced earlier this year to return £200m, or 212p per share, to shareholders by April 2003.

Ralph Findlay, Wolves' chief executive, said the brewer had received indicative offers worth £121m for the 170 pubs it plans to sell, including the Pitcher & Piano chain, but hoped to raise £135m in total.

"Everything is about shareholder value," said Mr Findlay, commenting on the brewer's forecasts that profits before tax for the full-year to 29 September will be £76m, up 17 per cent from a year earlier. Exceptional items, resulting from rationalising brewing activities and restructuring the pub estate, are expected to total £10.6m.

John Sand, chief executive of Pubmaster, which is part-owned by the German bank WestLB, attacked Wolves' latest defence document as "nothing new, just more promises that things will be better in the future". Mr Sand said: "The choice is 480p in cash now or further depressing failure from the current Wolves management team."

Wolverhampton & Dudley, the brewer of Banks's bitter and Marston's Pedigree, said like-for-like sales in its 550 managed pubs had increased by 3.2 per cent in June. It added that a valuation by Christie & Co of the brewer's retained pub estate was worth 181p per share over its current book value of 483p per share.

Pubmaster, which went hostile with its bid on 1 June, has until next Monday to raise its offer. It has 4.9 per cent acceptances so far.

Wolves shares edged 1p higher to 481p.