Barclay brothers join S&N pubs bid

THE billionaire Barclay brothers have emerged as eleventh-hour bidders in the £2.5bn auction for Scottish & Newcastle's pubs.

Second round offers must be made today. Obsessively private twins David and Frederick Barclay join a long list of candidates vying for the 1,450 pubs, which include the Chef & Brewer and Premier Lodge chains. Their book value is £2.3bn, but higher bids are expected.

Also in the race are Mitchells & Butlers, Pubmaster, the Laurel Pub Company, Spirit - a pubs group spun out of Punch Taverns - and French venture capitalist PAI Management.

Another secretive duo, the Reuben brothers - who made their first fortune in Russian aluminium - are also interested.

Bid excitement is heating up at spirits group Allied Domecq. New talk that Brown Forman of the US is considering a £5bn bid for the maker of Tia Maria and Ballantine's whisky set the market buzzing. Shares magazine suggested a bid would be pitched at around 440p. The stock rose 2p to 385p with 19m traded.

At S&N, competition for the pubs is expected to be fierce. Private equity players CVC Capital and Cinven are circling, as well as Hugh Osmond of Sun Capital and Guy Hands of Terra Firma.

It will take about a week to whittle down the bids to a handful for the next round. Then detailed talks will begin about the sale and an S&N beer contract.

Mitchells & Butlers took a knock from broker WestLB, which doubts that the brewer has the know-how to swallow the S&N pubs successfully if it wins.