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Vaux responds to bid approach

Clifford German
Thursday 04 June 1998 23:02 BST
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THE THREAT of further brewery closures loomed yesterday after Vaux, the Sunderland-based brewer and owner of the Swallow hotel chain, confirmed an unsolicited approach from an unidentified company looking to make an agreed bid.

Its chairman, Sir John Nicholson, repeated his belief in the group's potential and prospects and asked the company's financial advisers, Noble Grossart, to seek further details.

But the group is considered vulnerable to a hostile bid. The recently appointed chief executive Martin Grant has yet to join the group and the shares, which have underperformed the stock market heavily over the last two years jumped 45p to 346.5p.

The most likely bidders are thought to be Stakis and American Patriot, and the main target is almost certainly the hotels, which have performed strongly, increasing profits by 14 per cent to pounds 12.1m in the six months to 31 March, and contributed 75 per cent of the group total.

The brewing and pub side of the business has been badly squeezed by the heavy investment by the national brewery chains and the fast-growing pub companies, and could be vulnerable in the event of a break-up. Vaux owns the Ward brewery in Sheffield as well as the Vaux brewery in Sunderland and has a tied estate of 843 pubs, of which 178 are managed.

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