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. Last Updated: 07/27/2016

Allied Domecq Backs Whitbread Offer

LONDON -- Opting for the lower bid, British food and drinks conglomerate Allied Domecq PLC recommended Tuesday that its shareholders accept Whitbread PLC's offer of pounds 2.86 billion ($4.56 billion) for its retail pubs.

But Allied's management board said it still plans to let shareholders vote on whether they prefer an alternative offer of pounds 2.93 billion from Punch Taverns Ltd.

The board's surprise decision follows weeks of acrimonious bids and counterbids between Punch and Whitbread as they struggled for the prize of Allied's 3,600 pubs and restaurants.

Allied's board announced its choice after a meeting that ran into the early hours of Tuesday. The meeting began Monday afternoon after Punch raised its bid a second time. "In reaching its judgment, the board had particular regard to the lower risk and the shorter timetable of the Whitbread offer, and the complex and inter-conditional finance structure of the Punch offer," Allied said.

Allied plans to write to shareholders July 7 to recommend the Whitbread offer and to hold an extraordinary general meeting for approving the sale of its pubs to Whitbread.