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Greene King keeps Spirit deal aflame

Greene King is pushing ahead with its takeover of Spirit Pub despite legislative upheaval in the pub sector.
November 25, 2014

Greene King (GNK) is likely to focus on its takeover of Spirit Pub Co (SPRT) when it releases interim results next week. The merger looks likely to go ahead, despite the likely introduction of legislation that would abolish the beer tie, which currently forces pub company tenants to buy beer and other drinks from their landlord - so-called 'wet rent'. The bid, worth 100p per Spirit share, was confirmed in early November and represents a 52 per cent premium to the target's share price prior to the negotiations.

IC TIP: Hold at 751p

The half-year results themselves follow a disappointing first quarter that prompted some analysts to downgrade pre-tax profit forecasts for the 2015 financial year and beyond.