Fuller’s £53.9m bid for Capital Pub Company rejected

Brewery and pub company Fuller’s approached the 34-site company on 22 March with an initial share offer of 175p, which was subsequently raised to 200p per share following its pre-close trading update on 26 April.

The reviewed offer represents a 29 per cent premium to yesterday’s closing price.

In relation to its offer, a statement from the company said: “Fuller’s is aware of Capital’s stated growth strategy which it believes will likely require further equity issuance. Fuller’s considers that there are considerable risks associated with the successful execution of this strategy that could dilute the overall quality and attractiveness of Capital’s estate and which could have a negative impact on valuation over time.

“In contrast, any offer by Fuller’s of 200 pence per Capital share would provide Capital shareholders with the certainty of a cash exit in the near term at a substantial premium. Fuller’s is therefore disappointed that Capital’s Board has declined to engage with it so far.

“Fuller’s would like to work towards a recommended transaction and establish a constructive dialogue with Capital. Fuller’s believes that it is in the interests of Capital shareholders for the Board of Capital to engage with Fuller’s in order to deliver an attractive cash offer in a timely manner.”

However Capital has considered the proposal to be ‘without merit’ and has deemed it ‘inappropriate’ to engage further with Fuller’s on the move. In addition, the company has advised all shareholders not to take any action.

Financial advisory and stockbroking company Peel Hunt has predicted that a bid from either Fuller’s or another company for 220p per share would succeed.

Capital currently has plans to grow its estate to 45-50 pubs over the next two years, and will release its final results for the year ending 26 March 2011 next week.