Greene King crowned by Capital takeover
GREENE King, the pubs and brewing group, yesterday trumped rival Fuller, Smith & Turner after landing the Capital Pub Company with a knock-out bid of £70million.
Capital recommended Greene King’s 235p a share offer after it said a 200p-a-share bid from Fuller “substantially undervalued” it and was “without merit”.
Fuller said it had no plans to make a counter offer. Greene King shares rose 1½p to 481½p, Capital’s 23p to 233½p, while Fuller rose 7¾p to 709p.
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The deal nets Capital co-founders, chief executive Clive Watson and David Bruce, up to £7million and £2million respectively. After starting the business in 2001, they had built it up into a chain of 34 pubs.
Greene King said there was 'significant opportunity' to grow food sales in the Capital estate
Greene King, which makes IPA, Abbot Ale and Old Speckled Hen, operates nearly 2,500 pubs. “Capital pubs will take our Greater London estate to approximately 250 at a time when London is outperforming the national pub market,” said chief executive Rooney Anand. “This offer represents a fair price for a high quality, largely freehold pub estate.”
The firm believes it can make £2million a year in cost savings and other benefits, including £1million in cuts to head office and core functions.
Greene King said there was “significant opportunity” to grow food sales in the Capital estate and said the increased exposure to London would be “especially beneficial” next year because of the Olympics.
The price Greene King is paying represents a 51 per cent share price premium.
Watson has said he would start another pubs company should Capital be sold. However, his immediate future will be tied up with ensuring a smooth handover.
