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U.K. bar battle reopens
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July 23, 1999: 3:41 p.m. ET
New bidders may emerge for whisky maker's $4.3B bar assets
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NEW YORK (CNNfn) - The three-month battle between Britain's largest pub owners took a new twist Friday when a surprise bidder emerged to threaten the agreed $4.3 billion sale of 3,500 pubs by Allied Domecq.
Allied wants to sell the pubs to focus on its core drinks business, producing market-leading spirits including Ballantine's whisky, Canadian Club and Courvoisier.
The company said Friday that it had provided information to two other potential bidders. These are thought to include Nomura International, a unit of the Japanese bank that is already the largest pub owner in the United Kingdom.
Allied agreed just Tuesday to sell its bar business to Punch Taverns, a privately held group controlled by U.S.-based Texas Pacific Investment.
Nomura is believed to have teamed up with Whitbread, the U.K. leisure group whose original standalone offer for the Allied business collapsed after regulators said it raised a threat to competition.
Whitbread and Punch had battled for more than two months for the pubs.
Nomura and Whitbread were unavailable for comment Friday, but the Japanese investment bank had been linked previously with the pub assets.
The bank's principal finance arm has built up a 10 percent share of the U.K. pub market through so-called "securitization" deals in which it buys the bars using cheap bond market funding, secured by future revenues from the bars.
Market observers have suggested a deal involving Nomura, Whitbread and another private investment group, Alchemy, which already has a chain of 800 pubs. Observers said the three could split up the Allied assets to avoid regulatory concerns.
The Allied board has recommended the Punch offer, which was lowered to 2.75 billion pounds ($4.3 billion) from 2.925 billion after Whitbread pulled out. However, shareholders are not due to vote on the deal until Aug. 2, leaving time for a rival offer.
With the London market down Friday, Allied (ALLD) shares fell 9.5 pence to 557.5 while Whitbread was off 13 at 892 pence.
-- from staff and wire reports
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Allied Domecq
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