Pubmaster, the tenanted pub group, had failed to persuade investors to sell out after a year-long takeover campaign. Robert Breare, its bidding partner, was dubbed “Britain’s most shambolic corporate raider” by one newspaper. During the battle, David Thompson, chief executive of Wolverhampton & Dudley (W&D), was pushed upstairs to become chairman.

Much to the City’s surprise, the 53% of shareholders who voted to maintain the firm’s independence have been wholly vindicated.

Investors rejected a 513p- per-share offer, which came after a series of earnings downgrades and profit warnings. This followed the troublesome acquisition of two rival brewers, Mansfield and Marston Thompson & Evershed.

Today chief executive Ralph Findlay, who was promoted from finance director in April 2001, stands on the brink of his third acquisition in less than a year and Wolves’ rehabilitation is complete.

“The company has come full circle,” said James Wheatcroft, leisure analyst at Investec Securities. “Acquisitions undermined the City’s confidence in the first place. Now they have rebuilt the company’s reputation.”

W&D shares now stand at £10.97, more than double Pubmaster’s offer, valuing the business at £842m. In the past year the stock has outperformed the FTSE All Share index by 21.5%.

The company has returned about £200m to shareholders since the bid. And in the past few months it has snapped up the pub chain Wizard Inns and Warrington brewer Burtowood. Last week it announced it intended to buy Jennings Brothers, a Cumbrian brewer and pub operator, extending its reach well beyond its Midlands heartland.

It is an amazing reversal. “Escaping from a takeover as they did acts as a kind of electric-shock treatment,” said Nigel Parson, leisure analyst at Williams de Broë.

That led to a return of confidence among the board, a commodity that was in short supply at the time of the bid battle.

“We knew the battle was going to be a close-run thing so I don’t think we could say that we were confident then,” said Findlay. “We were confident in rejecting the bid but we didn’t know what the outcome would be.”

He added: “The acquisitions we have made are a result of the confidence we have that when we buy these things, we can do better and create more value out of the assets than the people who are selling them.”

It is a far cry from 2001 when the idea of W&D being allowed by its shareholders to go on a £250m spending spree was laughable. Indeed, as one adviser to the group remembers, if Pubmaster and Breare had managed an extra few pence per share, they would have ended up victorious.