Allied Leisure has won control of European Leisure, but with the slimmest of margins. This marks the end of a bitter tussle involving a hostile bid for European from rival leisure company, Waterfall Holdings. Allied had received acceptances from shareholders representing 50.36 per cent of the equity by 2.30 p.m. yesterday, the final closing date. The offer has now been declared unconditional and will remain open for acceptances until further notice.

Allied has won control despite a higher offer from Waterfall which had received acceptances from shareholders representing between 15 per cent and 16 per cent. European has a 24 per cent stake in Waterfall, and Allied has reiterated that this will be sold once the merger has been completed. Reacting to Allied's victory, Waterfall said current trading is highly satisfactory and it will now concentrate its efforts on maximising its trading results for the 1999 year and "continuing to generate value for its shareholders". However, Waterfall noted that, in accepting Allied's offer, "European shareholders have chosen to reject an offer which is 23 per cent more valuable" and believed the reason for this "lies in the high level of crossover between the shareholder registers of Allied and European".

Allied, which received irrevocable acceptances from the directors of European, representing 0.4 per cent of European's equity, will have to gain a 90 per cent holding to compulsorily acquire the remaining shares.

Mr Neil Goulden, Allied's managing director, said the merged group will have a business focused on two market-leading leisure brands, Rileys and Megabowl, and a well-financed and resourced strategy for growth. "Our task now is to get down to the business of implementing this strategy and delivering value to our shareholders." Allied and European began merger discussions last February and agreed to an all-share deal which would have led to European shareholders receiving 52 per cent of the enlarged group with Allied shareholders receiving the remaining 48 per cent.

But it was obviously a take-over by Allied as that management was to run the enlarged company. Mr Ian Rock, chief executive of European and his colleague, Mr Patrick Hooper, finance director of European, agreed to resign once the deal was completed. Waterfall's rival bid forced Allied to increase its offer and now European shareholders will end up with 56 per cent of the enlarged group.