Caledonia Investments takeover bid for ALE pub portfolio languishes

Caledonia Investments seems set to walk away from its ­hostile takeover bid for ALE Property Group, owner of a $900 million pub portfolio.

The largest investor in ALE Property lobbed its $770-million all-cash takeover offer in October.

But the Australian Financial Review's authoritative Street Talk column says Caledonia is expected to formally withdraw after prolonged talks with the company failed to strike a deal on the offer at a 74% premium to ALE's net tangible asset value.

ALE owns a $900 million portfolio of 86 pubs which are operated by ALH, a joint venture between Woolworths and Bruce Mathieson.

Woolworths is ALE's second largest shareholder with around an 8% stake.

Led by Mark Nelson, the Sydney-based private investment group holds around 26% of ALE, which engaged Macquarie Capital for its defence.

Caledonia, which hired Moelis & Company, was set up in 1992 to manage the fortunes of the Darling family and later adding the Nelson and Vicars families.

It has $2.8 billion under management.