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LONDON (CNNfn) - Punch Taverns dealt what could be the deciding blow in the bitter battle for control of Allied Domecq's pubs unit Monday, when it raised its offer to 2.925 billion pounds ($4.68 billion).
Allied's board meets Monday to decide who should own the 3,500 pubs as well as a share in a liquor store chain and a soft drinks venture.
"I guess Punch are trying to knock Whitbread's share price [to lower the value of the brewer's mainly stock offer]" one person close to the negotiations told CNNfn.
The latest Punch offer is the closely-held group's third stab at buying the business from Allied, although in the past Allied's board has preferred two rival offers from giant leisure group Whitbread.
Punch raised its offer Monday by around 3 percent to 2.925 billion pounds, and it now includes shares in its bid for the first time. Previously, Allied Domecq shareholders had been offered straight cash, but brewer Bass, which has agreed to buy up to 650 of the pubs from Punch, is offering a stock alternative as part of the new deal.
A spokesman for Whitbread responded to the latest Punch offer, "This confirms what we have thought all along, that Punch is merely front-running for Bass. Now Allied Domecq shareholders can choose between Whitbread and Bass stock." Whitbread's spokesman refused to say whether the group would respond with another raised offer of its own.
Punch said its offer is worth 277 pence per Allied Domecq share, and is conditional upon approval by the Domecq board by the end of Monday.
Whitbread's last offer, made Friday, is worth 2.877 billion pounds, with a 1.5 billion pound cash element.
An Allied spokesman said the group's board meeting would go ahead as planned Monday.
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