Magners cider group C&C attempts to gatecrash Greene King talks with Spirit
- Credit: PA
Pub company Spirit has rejected an attempt by the Irish-based drinks group C&C to gatecrash its takeover talks with Greene King.
Spirit unexpectedly became the subject of a bidding contest when C&C, which produces Magners cider and Tennent’s lager, tabled a cash and shares offer valued at £750million.
Although, on paper, this trumps the offer from Bury St Edmunds-based Greene King, which also involves a mix of cash and shares, the C&C approach has been rejected by the Spirit board.
With Greene King already operating a substantial pubs business, its proposed tie-up with Spirit is viewed as offering greater syngeries.
C&C, which is run by a number of former executives of brewer Scottish & Newcastle and does not own any pubs at present, outlined its interest in a stock market statement today.
The Dublin-based company said: “An acquisition of Spirit, one of the highest quality pub estates in the UK, would transform C&C and enhance long-term shareholder value”, adding that the deal would offer “a compelling consumer platform” for C&C’s brands.
Spirit has an estate of 794 managed pubs including those under the brands Chef & Brewer Fayre & Square, Flaming Grill, Taylor Walker and John Barras.
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There are also 433 pubs in its leased estate, the majority of which are former managed sites with an average annual net income of over £100,000.
Earlier this week, Spirit posted an 11% rise in underlying profits to £60m for the year to August 23 and said it saw the opportunity to build a branded pub estate of around 1,200 sites.
Greene King, which currently has around 1,900 pubs and restaurants alongside brewering operations in Bury St Edmunds and Dunbar in Scotland, is prepared to hand Spirit shareholders a 29% stake in a combined company.
Spirit’s board has said it is minded to accept the proposal as long as it can agree final terms. The proposal values Spirit at 113.5p based on last night’s closing share price for Greene King.
The C&C offer is reported to be worth 115p a share.