Australian Leisure Shares Surge, Sparking Talk of Bid (Update3)...

Australian Leisure Shares Surge, Sparking Talk of Bid (Update3)
July 1 (Bloomberg) -- Shares of Australian Leisure & Hospitality Ltd., the nation's biggest pub operator, surged, sparking speculation closely held pub owner Taverner Hotel Group may make a takeover bid valuing the company at at least A$970 million ($677 million).

``The rumor is that Taverner is the likely bidder,'' said Jamie Spiteri, head dealer at Shaw Stockbroking Ltd. ``A specialist pub owner is about the only type of company that could make a fist of it.''

Melbourne-based Taverner operates more than 30 hotels in South Australia and Victoria states. Taverner Chief Executive Officer Bob Taylor was traveling and not immediately available for comment.

Australian Leisure operates more than 130 pubs, with 6,000 slot machines, in five Australian states. Foster's Group Ltd., Australia's biggest brewer, sold the business in an initial public offer in November.

Australian Leisure shares rose 31 cents to A$2.79 at 2:28 p.m. in Sydney. More than 37.7 million shares were traded at A$2.75 each in so-called special sales. Most of the trading has been done by UBS Securities Australia Ltd. according to Bloomberg data.

A bid at A$2.75 a share would value the Melbourne-based company at A$970 million.

Australian Leisure spokesman David Read didn't immediately return calls seeking comment. UBS spokeswoman Caroline Gurney wasn't immediately available to comment.

The stock was sold at A$2.50 a piece in the initial public offer. It fell 4.8 percent on the first day of trade and didn't return to the IPO price until today.

``No one appears to have taken an interest since Foster's spun it off,'' Spiteri said.