A 157-year-old Liverpool brewer owned by two second-generation Indian brothers is to join the stock market through a reverse takeover of Honeycombe Leisure, the AIM-listed pub operator.

Robert Cain & Co, which was rescued from collapse five years ago by the Dusanj brothers, will announce this week that it is being subsumed by Honeycombe in a deal that values the enlarged company at about £37 million, including debt and loan stock.

The deal, which comes after the supension on Friday of trading in Honeycombe’s shares, is expected to lead to the group changing its name to the Cains Beer Company. Sudarghara and Ajmail Dusanj will join the board as, respectively, chief executive and chief operating officer.

The move, believed to be the first stock market listing by a regional brewer since Scotland’s Belhaven in 1996, will give the brothers a combined stake of about 58 per cent in the enlarged company.

They will inject about £2.5 million into the business in the form of loan stock, while Honeycombe will raise a similar sum through a share placing, giving the company about £5 million of new funds for investment. The market capitalisation of the enlarged group will be about £7.5 million.

Honeycombe, which has 100 pubs in the North West, has been short of funds for some time and has been in bid talks with suitors for most of the past 12 months. In September, it was approached by Sandy Anderson, its chairman and 38 per cent shareholder, about taking the group private. An unnamed third party also made an approach.

The deal will cap a remarkable turnaround for Cains Brewery in Stanhope Street, Liverpool, which, when the Dusanj brothers bought it in 2002, was on the brink of closure for the second time since 1990, when it was shut down by Whitbread. Today, the Cains brewery sells beer to its own estate of nine pubs as well as to third-party operators, super-markets and wholesalers. Last year, it made underlying operating profits of almost £400,000 from turnover of £24 million.

The acquisition will allow the brewery to boost its sales by putting its range of Cains beers, which include bitter, mild and lager, into the Honeycombe estate, creating a vertically integrated brewer.

The brothers are thought to see the deal as the platform to turning Cains into a national player. The brothers, whose father Surinder came to Britain from Punjab in 1962, started out working in their father’s fish and chip shop in Kent. They went on to buy several fish and chip shops, off-licences and corner shops before buying a failed drinks wholesaler in the Midlands. They acquired Cains after reading that it had been put up for sale by the Danish Brewery Group.

After the appointment of the brothers – who three years ago controversially were refused membership of the Independent Family Brewers of Britain – to the Honeycombe board, Mr Anderson will step down as chairman and James Baer will quit as chief executive.

None of the parties involved would comment.

Stanhope Street story

1844 Robert Cain, an Irishman from Co Cork, moves to Liverpool

1850 Buys his first pub and starts brewing ales

1858 Acquires brewery in Stanhope Street and builds estate of 200 pubs

1887 Builds new brewery on Stanhope Street site

1907 Robert Cain dies.

1911 The Robert Cain business merges with Walkers of Warrington and production shifts to Warrington

1923 Stanhope Street brewery is sold to Higsons

1985 Higsons sells out to Boddingtons, of Manchester

1990 Whitbread acquires Boddingtons, closes Cains brewery and then sells it to the Danish Brewery Group

2002 Buyout by Dusanj brothers

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