Pubmaster offer described as illusory

Wolverhampton and Dudley Plc (W&D), the UK’s largest regional brewer, has told shareholder to reject the hostile £453m bid put on the table by Pubmaster, the pubs group that is partly owned by WestLB.

In its official defence document, W&D said Pubmaster’s offer of 480p per share amounted to a mere price earnings multiple of 8.4 times, which compared with a PE ratio of 14.6 for similar companies.

The brewer also said Pubmaster’s offer failed to do justice to the fact that its share price has risen by 38 per cent since takeover offer interest first mounted last year. W&D says Pubmaster offers a premium of 35 per cent only.

David Thompson, the brewer’s chairman, said “Pubmaster knows that W&D is worth much more than they’re offering. 480p is not a serious offer: it takes no account of the sector re-rating, the inherent value of W&D, our strong recent and current trading performance, or our future potential.”

Pubmaster has recently rejected suggestions that it may re-evaluate its offer and increase the price.