GPG takes fight to UK brewer

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Sir Ron Brierley's Guinness Peat Group is leading a shareholder revolt against the 200-year-old British brewer Daniel Thwaites and plans by the Lancashire beer and pubs business to sell its Stafford Hotel in St James's Place, central London, for about £75 million ($192 million).

It comes as Guinness Peat prepares for what could be a turbulent CSR shareholders' meeting tomorrow when the struggling sugar, building materials and aluminium company may unveil further details of its plan to demerge its sugar assets. Guinness Peat has a 5 percent stake in CSR and has been lobbying for a restructure at the conglomerate.

Guinness Peat, which has a diverse investment portfolio worth about £900 million, holds a 6 percent stake in Thwaites and has written to the brewer's board arguing against the sale of its historic London hotel.

Guinness Peat says the mooted sale price for the hotel of £75 million is tantamount to a "fire sale" and would cause "an immediate and material diminution in shareholder value".

Sir Ron's company believes that in an improved economic climate the Stafford Hotel could sell for at least £100 million. If Thwaites refuses to freeze the auction process, Guinness Peat will be forced to raise its concerns directly and publicly with shareholders, its letter warns.

The letter was sent to Ann Yerburgh, the brewer's chairman and a member of the founding Thwaites family. It says: "It is equally plain that the decision to enter, at such a wholly inappropriate juncture, into a process for the disposal of the Stafford was driven entirely by the need to reduce debt."

Guinness Peat offers in the letter to subscribe for new shares worth up to £20 million to allow Thwaites to reduce its net debt of £136 million.

It says: "We would not be averse to the new shares being offered publicly or privately to existing shareholders."

Thwaites is best known for ales such as Lancaster Bomber and Nutty Black, and has 400 pubs and nine Shire Hotels.

- © Fairfax NZ News