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. Last Updated: 07/27/2016

Punch Taverns Hikes Allied Bid to $4.5Bln




LONDON -- Punch Taverns landed what it hoped would prove a knock out blow in the battle for Allied Domecq PLC's British retail business on Tuesday with a cash offer valuing the pubs unit at pounds 2.85 billion ($4.51 billion).


The privately owned group aided by financier George Soros said its new offer, increased from its initial pounds 2.7 billion bid last Thursday, represented a 20.4 percent premium to a rival all-share bid from Whitbread PLC.


As part of the increased offer, Punch said its partner Bass PLC would raise the amount it was ready to pay for its choice of up to 650 Allied pubs and a stake in Britannia Soft Drinks to pounds 1.015 billion from pounds 985 million.


Allied said it would consider the offer carefully but was still worried that it was less watertight than Whitbread's. It said it wanted certain legal issues clarified.


Punch stole a march on Whitbread, which discussed Monday whether to raise its offer but has so far made no announcement.


Whitbread chairman Michael Angus said he would make a statement later on the new Punch offer.


"It looks very much like a pre-emptive move, heading off a possible rise in the Whitbread offer," said Jeremy Batstone of NatWest Stockbrokers. Whitbread, whose bid has the backing of the Allied board and will be put to Allied shareholders Friday, is offering its own shares rather than cash in return for 3,544 pubs and stakes in the soft drinks business and off-licenses.


As its share price has fallen in recent days, the value of the bid has dipped to pounds 2.39 billion, or 228 pence ($3.60) per Allied share, based on Whitbread's Monday closing price. Whitbread shares dropped a further 2.14 percent by midday, to pounds 10.10 Tuesday.


One dealer said the fear was that Whitbread might now end up paying too much if it tries to defeat Punch.


Weekend press reports suggested Whitbread may add pounds 400 million in cash to its original offer of 230 million new Whitbread shares.