Wolverhampton in a £120m round
BREWER Wolverhampton & Dudley has struck a £120m deal to buy rival Burtonwood and catapult itself into the top three UK pub groups.
The two have agreed a 550p-per-share offer which would hand Burtonwood chairman Richard Gilchrist an £11m windfall.
It would also mean big paydays for Mayfair hedge fund Landsdowne and drinks giant Allied Domecq, which hold 9% and 5% stakes respectively.
Wolves chief executive Ralph Findlay said the Burtonwood business was an 'extremely good fit' and vowed to hunt for fresh targets, given the increasing cost pressure on smaller groups.
He said: 'The sector is going to continue to consolidate. We are interested if we can buy a business like this, where we can do something to improve the performance and get value for our shareholders.'
Burtonwood operates 460 pubs in the North-West and brews a collection of bitters including Top Hat. Its shares shot ahead 6%, or 32 1/2p to 545p. They were trading at 384 1/2p before talks emerged last week.
The deal takes the Wolves' estate to 2135 sites and places it firmly behind Enterprise Inns and Punch in the pub group league table.
Full-year results unveiled by Wolves today showed underlying pre-tax profits rose 6% to £77.7 million in the year to 2 October on turnover of £513.7 million, up 5%.
Wolves shares rose 13p to 960p.
