Shareholders in Britain's largest independent brewer have rejected a �485m hostile takeover bid by Pubmaster.

The Wolverhampton & Dudley Brewery owns the Pitcher & Piano bar chain and beer brands such as Marston's and Banks's.

Its shareholders voted to reject the cash offer, which expired at lunchtime on Monday.

Support for the bid had risen from less than 20% of shareholders on Friday to more than 40% early on Monday, but in the end only 47% voted in favour of the 513p per share bid, just short of the 50% majority required.

Wolves' shares slipped about 7%, or 35p to 460p following the rejection.

Year-long battle

Pubmaster had begun its battle to acquire Wolves last year after the brewery had received a takeover approach from hotels magnate Robert Breare and his company Noble leisure.

Pubmaster's bid had been fiercely opposed by Wolverhampton & Dudley, which mounted a defence that included plans to sell 170 pubs, including Pitcher & Piano, and to pay back more than �200m to shareholders over the next couple of years.

Analysts say that if Pubmaster's bid had succeeded, the company would probably have sold some of the brewer's pubs to Mr Breare's company.

Wolverhampton & Dudley owns 1,500 pubs and four breweries.

Shake-up

Wolverhampton & Dudley was last autumn spurred on by Mr Breare's takeover approach to launch a strategic review which included several options for how to bring the business forward.

One of the options was to accept a takeover bid, and at some stage its managers considered a buy-out of their own.

In June, Wolverhampton &Dudley had rejected an earlier 480p a share offer from Pubmaster.

The offer was made through Pubmistress, a Pubmaster investment vehicle formed for the purposes of the bid that also includes backers West LB and property firms Rotch and St Mowden.

Pubmaster was itself bought by managers from the conglomerate Brent Walker in 1996, for �171m.

The June bid for Wolverhampton & Dudley came after the brewery, which has run up debts through deals such as the 1999 takeover of the brewer Mansfield, revealed plans in April to focus on its beers and community pubs portfolios.