Spirit considers improved Greene King offer
Pub group Greene King has made an improved takeover offer for Spirit this weekend worth more than £720m.
The board of Spirit, headquartered in Burton, has signalled it would be willing to recommend the bid to its shareholders.
The revised proposal comprises 0.1322 Greene King shares per Spirit share and a cash payment of 8p, including any 2014 final dividend.
It values Spirit at about 109.5p a share based on the closing price of Greene King shares on Friday (17 October 2014). The cash-and-stock offer is worth about £723m and would mean Spirit shareholders would own about 29 percent of the combined group.
It follows last month's (September 2014) confirmation that the two groups were in talks, sending Spirit shares soaring. Spirit rejected a preliminary offer of 100p per share worth about £660m.
The revised proposal remains conditional on, among other things, confirmatory due diligence and the recommendation of the board of Spirit.
"The board of Spirit has indicated to Greene King that it would be willing to recommend an offer at the level of the revised proposal to Spirit shareholders subject to the satisfactory resolution of the other terms of the offer," a statement to the stock exchange this morning said.
"Accordingly, the board is in discussions with Greene King in relation to these terms."
Suffolk brewer Greene King manages about 2,000 sites including Hungry Horse, Old English Inns and Loch Fyne Restaurants.
Spirit, which announces its preliminary results for the year ended 23 August 2014 this week (22 October 2014), has an estate of almost 800 pubs, including the Chef & Brewer and Fayre & Square brands. It bumped up earnings by 2 per cent to £150m and pre-tax profit by 6 per cent to £54m in its last financial year. Revenue, however, slipped slightly from £760m to £758.2m.