View from City Road: Brierley bid on course for defeat

ANYONE who wants to see a mountain made out of a molehill should look no further than Brierley Investments' takeover bid for Gibbs Mew. The offer of 200p per share is inadequate against a 280p asset value, and destined for failure. Majority control of Gibbs' brewery and pub operations, a mere pimple in the industry, is snugly in family and directors' hands.

To make a hostile bid under these circumstances defies logic, leaving the bid emphasis on strategy - an area where Brierley has a far from perfect record. That includes two unsuccessful tilts at Molins, in 1987 and 1989, an attempted break-up of Vickers, and the surprising conquest of Mount Charlotte with a laid-back bid in 1990.

So far, Brierley's latest campaign has mustered acceptances for 4.38 per cent of Gibbs. That level is construed as meagre by Gibbs, or, in Brierley's words, as an 'excellent result' since it represents capitulation by one in five of the independent shareholders. But the City expects a win for Gibbs and the shares retreated 5p to 178p yesterday.

Brierley, after all, has in effect closed the door on making a higher offer by threatening to let the current bid lapse if Gibb's shareholders approve the company's own takeover of UK D, a drinks distributor. (The purchase has the nod from the majority of shareholders.)

Gibbs' last foray into wholesaling, the purchase of Robert Porter in the 1980s, was a disaster. But this time things look different. John Hedderson, part-owner of UK D, will become a big shareholder, and managing director at Gibbs. Unless Brierley knows something we do not about UK D, it should slip inconspicuously into the background.