Pubmaster Set to Grow

Article excerpt

JOHN Sands, chief executive of Pubmaster, the tenanted pub group trying to buy Wolverhampton & Dudley Breweries, promises more acquisitions even if he succeeds with his [pound]453m hostile bid for the Midlands beermaker.

W&D is the third major target for Pubmaster this year after it lost out on bids for Whitbread's pubs arm and a package of 1,000 pubs sold by Bass. But it seems that more could follow.

In his first interview since launching the company's bid, Sands said: "The W&D transaction is a good transaction and we won't stop there. We're not deal junkies, but we will try and do a major transaction a year."

But first there is the small matter of the W&D bid, which currently stands at 480p per share.

One major shareholder says if Pubmaster, 40%-owned by German bank WestLB, ups its offer by 10% it would "go through". A leisure analyst says investors should hold out for closer to 600p.

Although the 480p per share offer is at a 35% premium to the W&D share price before any bid prospects emerged nearly a year ago, W&D has argued that the bid does not take into account the fact that valuations of brewers and pub companies were at a low last August because of interest in dot.com stocks.

The logic is lost on Sands, who also refuses to be drawn on the prospect of a raised bid: "At this moment in time, the offer on the table is the offer. As for their valuation argument, it's slightly flawed in the sense that one wonders what their share price would be if Pubmaster wasn't there. If the sentiment's there and the rating's there, why has the share price not gone up?"

He thinks a clue could lie in W&D's ability to run pubs. In its defence document, W&D says if it retains its independence it intends to develop a fledgling pub format called "Bostin Locals". …