C&C misses out as Greene King agrees Spirit takeover

Brewer and pub owner Greene King said it had reached an agreement on a recommended offer for Britain's Spirit Pub Company, valuing Spirit Pub at about £773.6 million.

The offer values each Spirit Pub share at 115 pence, comprising 0.1322 new Greene King share and 8 pence in cash, based on Greene King’s closing price yesterday.

Spirit Pub recently rejected a takeover approach from cider maker C&C but gave the Irish firm a month to submit a formal offer to challenge the Greene King bid.

The proposed deal would result in Spirit Pub shareholders owning about 28.9 per cent of combined new Greene King. Last week, Spirit Pub said it had agreed to extend the deadline for the takeover offer until November 4th.

Greene King is shifting its focus to its own-managed retail business, comprising restaurants, hotels and pubs, as it competes for a bigger slice of the dining market and to that end is reducing its tenanted and leased estate.

Spirit Pub, which was spun out of Punch Taverns in 2011 and runs chains such as Chef & Brewer, Fayre & Square and Flaming Grill, is split into more than 750 managed pubs and 450 leased pubs. Managed pubs account for nearly 90 percent of the group's revenue.

Greene King and Spirit Pub will also benefit from a larger exposure to the economically stronger London and southwest regions of Britain, while the combined group could expect to achieve costs synergies of at least £30 million per annum, Greene King said on Tuesday.

C&C was believed to be preparing a new €1 billion bid for Spirit after its recent preliminary approach was rebuffed.

The Bulmers/Magners cider maker, which lost about an eighth of its market value in recent weeks, had said it would consider “downsizing” its struggling business in Engalnd and Wales if its plan to take over Spirit failed.

Reuters