Banks's hit shares high

Shares in Banks's brewer Wolverhampton & Dudley reached record levels after City rumours of a £3 billion merger with Suffolk-based rival Greene King.

The Black Country brewing and pubs giant saw its share price jump 10p to 1,570p as rumours of the lucrative merger deal spread in the City.

Talk in the City suggested that the highly acquisitive and bigger Greene King wanted to tie the knot on an agreed "marriage" before a total smoking ban comes into force next summer.

Wolverhampton & Dudley Brewery (W&DB) has been in the spotlight since earlier this year after speculation linked Iranian property and pubs entrepreneur Robert Tchenguiz, who had allegedly turned his attentions to the Black Country business- famous for its Banks's and Marston's Pedigree ales.

Mr Tchenguiz earlier abandoned a high-profile takeover battle for control of managed pubs operator Mitchells & Butlers, based in Birmingham.

The share price in W&DB early today values the group at more than £1 billion.

The group employs around 12,000 people, with a turnover of around £600 million, in breweries in Wolverhampton, Burton and Cumbria and a stable of around 1,600 pubs.

W&DG, with headquarters in Chapel Ash, Wolverhampton, is the UK's largest independent pub group and biggest producer of cask ale.

After shaking off a hostile takeover bid from Pubmaster in 2002, the group has flourished.

Greene King, valued at £1.45 billion, paid £187 million for Belhaven, Scotland's largest independent brewer, and acquired Hardys & Hansons, a based in Nottinghamshire.

A W&DB spokesman refused to comment.

By Business Editor Jim Walsh