Greene King increasses bid for rival brewer Spirit | City & Business | Finance | Express.co.uk

Greene King ups bid for rival SpiritGREENE King is closing in on a deal to become Britain’s biggest managed pubs chain after topping up its bid for rival Spirit. By David Shand 00:00, Tue,

Oct 21, 2014 Share Article Share Article Facebook X LinkedIn Reddit Bluesky Email Copy Link Link copied Bookmark Comments If the deal goes through Greene King will become the UK's largest

pubs chain [VETTA/GETTY]

Suffolk brewer Greene King, which operates nearly 2,000 pubs in the UK and whose ales include Abbot and Old Speckled Hen, made a revised 109½p shares and cash offer valuing Spirit at

£723million – a 20 per cent premium to Spirit’s closing price on Friday.

Last month Spirit, which has about 1,200 pubs following its demerger from Punch Taverns three years ago, rejected Greene King’s £661million takeover approach, saying it under­valued the

business.

Article continues below ADVERTISEMENT Under the revised proposal, Spirit shareholders would own about 29 per cent of the combined new Greene King

Spirit, whose brands include Chef & Brewer and Flaming Grill said it was willing to recommend the new deal to its investors “subject to the satisfactory resolution of the other terms of the

offer” and is discussing these terms with Greene King.

It has agreed to an extension of a Takeover Panel deadline until 5pm on October 30 but added there can be no certainty a firm offer will be made.

Under the revised proposal, Spirit shareholders would own about 29 per cent of the combined new Greene King. About 1,700 of the combined watering holes would be managed pubs, owned and run

by the group.

Greene King is shifting more attention to its own-managed retail business, comprising restaurants, hotels and pubs, to grab a bigger share of the ­dining market, while at the same time

reducing its tenanted estate.

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Earlier this year, it pulled out of the bidding race for the majority of pubs owned by rival Orchid Group. These were sold to All Bar One operator Mitchells & Butlers for £266million.

Analysts said the revised offer would probably succeed, despite risks ­associated with the large share component in volatile markets.

Mark Brumby, of Langton Capital, said: “There is no mention of any break fee and there are clearly conditional terms. The door in theory at least may be open to a rival bidder such as a

private equity house such as Hawthorn. In practice it is perhaps likely that this deal will come to fruition.”

Spirit shares rose 8¾p to 99¾p. Greene King was up 7p to 775p.