Pub operator Eldridge Pope last week announced the end of takeover talks and the appointment of a new management team alongside a set of "very disappointing" interim results.
The company, which operates 121 managed pubs and 54 tenancies, said it had held merger talks with a number of parties since receiving an approach in April. It has now closed the discussions because the proposals "significantly undervalued the business and its pub portfolio".
Wolverhampton & Dudley was believed to be in the forefront of these talks, with interest also coming from Greene King, Young's, Punch Taverns, Noble House and CI Traders. Although the talks are over, takeover speculation reignited last week when it emerged pub entrepreneur Michael Cannon had built up a 7.3% stake.
Susan Barratt has been promoted from financial director to chief executive, replacing Michael Johnson, who has left the company. Chris Pedder and James Eyre have been promoted to financial director and operations director respectively.
For the half-year to 5 April, Eldridge Pope reported pre-tax profits of £120,000, down from £1.9m the year before. After an exceptional loss of £9.5m on pub disposals, the group made a pre-tax loss of £9.4m compared with a loss of £1.4m for the same period of 2002.
Although overall turnover grew by 2.7% from £33.1m to £34m, it would have been £2.8m less if new pubs were excluded. The 9.6% decline in first-half like-for-like sales has, however, improved in the second half, which is showing a 5.7% fall.
Barratt blamed the results on tough market conditions, the disruption of the takeover talks and a small number of "poor investment decisions".
She conceded that Eldridge Pope had "sought to expand too quickly, reducing the quality of investment, and was thus wrong-footed when the market turned down".
The group plans to sell 20 problem pubs by the end of the year for an estimated £7m, which will help to reduce its debts of £44.8m. It will concentrate on community pubs, food and accommodation inns, town-centre bars and quality tenancies. Occupancy at its 500 bedrooms across 36 sites grew from 46% to 48%.