CAMPAIGNS: Breweries go on double defensive - Mergers and Acquisitions

The Wolverhampton and Dudley Breweries (W&DB) had been trying to negotiate a friendly merger with fellow Midlands brewer Marstons, Thompson and Evershed for a number of years.

The Wolverhampton and Dudley Breweries (W&DB) had been trying to

negotiate a friendly merger with fellow Midlands brewer Marstons,

Thompson and Evershed for a number of years.



Then, on 16 November 1998, Marstons announced it did not want to merge

after all, but was instead going to dispose of its tenanted pub estate

and expand its high street Pitcher and Piano chain.



This strategy was very different from W&DB’s vision of creating a

larger, more competitive regional brewer. So, on 26 November, it

launched a takeover bid for Marstons.



Objectives



To ensure financial media and analyst support for W&DB’s strategy for

the combined business and recommended acceptance of its offer.



Tactics



Hudson Sandler put together a press release setting out W&DB’s core

messages and followed this up with presentations to key analysts and

journalists.



The agency felt that face-to-face contact would be the most effective

way of influencing opinion.



A lot of emphasis was placed on the successful track record of W&DB’s

management. Early on in the campaign, Hudson Sandler persuaded the

Sunday Times to run a profile piece on managing director David

Thompson.



On 8 January, the campaign took a new twist when Marstons deployed the

so-called ’Pacman’ defence. It launched a hostile offer for W&DB in

which it proposed closing the latter’s two breweries and selling the

combined tenanted estate.



The battle was definitely on as the two rivals and their PR firms -

Marstons had Brunswick on its side - vied to win the hearts and minds of

shareholders.



On the one hand, Marstons was proposing a radical new direction that

would involve downsizing and a high degree of risk. Against that, W&DB

was prepared to play on its traditional values and talked about creating

a stronger and more competitive brewer in its core markets in the

Midlands and the North.



As well as winning endorsement for W&DB’s strategy, a key part of Hudson

Sandler’s work was to attack Marstons. This meant responding quickly to

any proposals or claims by Marstons in time to make the papers the same

day. The firm spoke to important commentators in the media on an almost

daily basis to make sure W&DB’s messages were consistently reflected

throughout their coverage.



Results



Hudson Sandler was very successful in drumming up support for its client

from media and analysts.



All nationals - including the Times, Sunday Times, Daily Mail and

Independent - that made a recommendation advised their readers to accept

the W&DB bid.



Virtually all leading analysts also showed support for the company’s

approach and advised shareholders to accept its offer.



On 4 February, W&DB announced that 73.45 per cent of Marstons’

shareholders had accepted its offer.



Verdict



Sheer hard work eventually paid off for Hudson Sandler with a very high

percentage of Marstons’ shareholders accepting W&DB’s bid.



By sticking to a consistent message about the company’s track record,

then arguing the case for the creation of a bigger brewer, and

constantly keeping in touch with leading commentators, it was able to

win the support of the media and analysts.



Client: The Wolverhampton and Dudley Breweries plc

PR Team: Hudson Sandler

Campaign: W&DB’s hostile bid for rival brewer Marstons, Thompson and

Evershed plc

Timescale: November 1998-February 1999

Budget: Undisclosed



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