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Allied pub battle's last call
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August 2, 1999: 6:59 a.m. ET
Bid deadline for pubs passes, leaving Punch's $4.5B offer as apparent winner
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LONDON (CNNfn) - Allied Domecq has almost closed the book on the prolonged sale of its 3,500-strong pubs portfolio to Punch Taverns after no new bidders appeared by Monday.
Allied's board last month accepted a 2.75 billion pound ($4.5 billion) offer from privately held Punch, and the deadline has now passed for new bids to be put to shareholders at an extraordinary general meeting on Aug. 23.
Private equity investors such as Alchemy Partners and Nomura were reported to be eyeing last-minute bids for the portfolio, but none are apparently willing to pay more than Punch.
The saga of the deal began when Allied announced it was in exclusive talks with rival operator Whitbread over its pubs portfolio.
Harsh words were exchanged, with frustrated bidder Punch angry that Whitbread was given an exclusive look at the books. Allied's board twice recommended offers from Whitbread over apparently higher bids from Punch. That led aggressive Punch boss Hugh Osmonde to accuse the company of "cronyism".
When U.K. competition regulators ruled that Whitbread's bid couldn't proceed it left Punch as the last man standing -- barring a new entrant such as Alchemy.
Punch withdrew its previous offer of 2.925 billion pounds, and came up with a final deal worth 2.75 billion pounds. Despite some of the last-minute brinkmanship that has come to characterize this matter, this is the deal that seems sure to carry the day.
Allied will now concentrate on its spirits business, with attention likely to return to perennial speculation of merger talks with a company such as Seagram (VO).
Punch has agreed that rival Bass will buy up to 650 of the pubs in the portfolio for a payment of around 1 billion pounds.
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Allied Domecq
Whitbread
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