Casualties expected as W&DB integrates Burtonwood

The new owners of Burtonwood's 460 pubs are moving full steam ahead with the integration expected to be completed by May.

Wolverhampton & Dudley Breweries' (W&DB) directors took ownership of the company on January 6 and have already earmarked several pubs for refurbishment, reviewed supply arrangements and written to tenants offering to bear the brunt of licensing reform costs.

W&DB chief executive Ralph Findlay described the £155m deal as a good fit with the existing estate both geographically and in terms of size.

W&DB made the unsolicited bid for Burtonwood in November and the speed of the deal took the City by surprise. The deal is made up of 420 tenanted pubs and 40 managed houses as well as ownership of the brewery which is currently leased to Thomas Hardy.

Mr Findlay said: "We offered 550p per share which was very good for them at a time when their share price was about 350p. Burtonwood's directors realised we weren't seeking to buy on the cheap and they recognised we would look after their people."

However, with the acquisition comes the inevitable shedding of jobs with a question mark hanging over 120 head office employees. The losses are expected to be announced later this month.

The deal came following a conscious decision to expand and was W&DB's second big deal of 2004 having brought Wizard Inns in June.

Mr Findlay said: "After Wizard we looked at the pot of operators being marketed and concluded that prices were not right for us. We looked at how we could move quickly. We were familiar with the Burtonwood business and knew they were finding it difficult to grow.

"For tenants the deal will mean access to a wider product range and more attractive agreements. The managed estate will benefit from being part of a bigger retailer.

"We are capable of integrating the estate quickly without over-stretching our resources."

The former directors of Burtonwood resigned on January 6 as W&DB officially took control of the business. Ex-finance director Nigel Wimpenny said: "The Burtonwood board discussed the offer at length before deciding it was too good not to be put to the shareholders.

"One of the attractions of the deal was that W&DB could move very quickly to prevent too much disruption for the employees."

This will not necessarily be a view shared by those facing redundancy, as Mr Wimpenny was forced to concede. "All employees will be kept on until the end of March, but there will be casualties," he said. "It's the same with any takeover."

The deal takes W&DB to 2,135 pubs, ahead of nearest rival Greene King, and firmly establishes its position as owner the third largest estate in Britain.