After initially rejecting a bid approach from Greene King (GNK) in September, worth 100p a share, Spirit Pub Company (SPRT) has this week recommended an improved offer from the rival pub operator. Greene King is now offering 0.1322 of its own shares, along with 8p in cash (to cover proposed and special dividend payments). That's worth 115p a share, representing a 52.2 per cent premium to Spirit's share price prior to news of talks.
However, Greene King isn't Spirit's only potential suitor. Late last month Dublin-based C&C (GCC) - famous for cider brands Magners and Bulmers, as well as Tennent's lager - also made an approach. That was quickly rejected by Spirit's board, even though the undisclosed offer was thought to include a higher cash element than Greene King's bid. C&C has until 20 November to decide whether to make a firm offer.
Should the Greene King deal go through, it will create the UK's largest managed pub group and should deliver cost synergies of at least £30m a year. The fit with C&C appears less obvious, although the group is thought to have wanted a retail operation for some time.
