SHARES in southern pub retailer Eldridge Pope fell sharply after it pulled out of merger talks and appointed a new chief executive.

Eldridge Pope, which manages and owns pubs in Southampton, Winchester, Eastleigh, Fareham, Brockenhurst and Lymington, appointed a new chief executive plus two new directors.

It also revealed that the deficit in its pension fund has grown from £10.7m in September 2002 to £12.7m.

Shares fell 11 per cent to 138.5p at the time of going to press.

Former finance director Susan Barratt was yesterday named as the new CEO. Predecessor Mike Johnson has left Eldridge Pope by mutual consent.

Chris Pedder (financial controller) and James Eyre have joined the board as finance director and operations director respectively.

Eldridge Pope said it had terminated merger discussions because the proposals "did not reflect the underlying value of the group".

Chairman Christopher Pope said: "Following discussions with a number of parties, the board has concluded that the proposals forthcoming significantly undervalued the business and its pub portfolio.

"The board is confident that greater medium and long-term value can be achieved for shareholders by trading the business through the current turnaround phase."

He praised employees for their "steadfastness" during "a hard time for all" - particularly given the level of press speculation about the company."

Chief executive Ms Barrett said: "It has been a tough six months and the trading outlook is still unpredictable.

"However, we are confident that the business will respond to the 'back to basics' approach."

Dorset-based Eldridge Pope yesterday reported a pre-tax profit of £100,000 for the six months to April 5, compared with £1.9m for the same six months in 2002.

It was "a disappointing result in extremely difficult market conditions," said Mr Pope.

Turnover rose by 2.7 per cent to £34m. Like-for-like sales in the ten weeks to June 14 were "improving" but were still down 5.7 per cent.