Company steps in with £2.7 billion offer to buy Greene King
A company has stepped in with a multi-billion pound offer to buy Bury St Edmunds pubs company Greene King.
The boards of CK Noble (UK) Limited (CK Bidco) and Greene King plc have reached an agreement on the terms of a recommended cash offer of £2.7 billion by CK Bidco for the share capital of Greene King.
The Greene King directors intend to recommend that the company's shareholders vote in favour of the scheme.
CK Bidco is a newly incorporated wholly-owned indirect subsidiary of CKA, which is a limited liability company incorporated in the Cayman Islands, registered in Hong Kong, and listed on the Main Board of the Hong Kong Stock Exchange.
George Colin Magnus, non-executive chairman designate of CK Bidco, said: "CKA's strategy is to look for businesses with stable and resilient characteristics and strong cash flow generating capabilities.
"The UK pub and brewing sector shares these characteristics and we believe that this sector will continue to be an important part of British culture and the eating and drinking out market in the long run.
"Greene King, being a leading integrated pub retailer and brewer with strong real estate backing, is well positioned to capture the opportunities that lie ahead.
"We are proud of our track record in the UK and our philosophy is to support strong management teams and provide investee companies with access to patient capital in order to create sustainable long-term value."
Commenting on the prospect of working with Greene King's team, Gerald Ma, executive committee member and general manager, corporate business development department of CKA, said: "We have come to know Greene King well as we have been an owner of a portfolio of pubs which have been leased to them since late 2016.
"We share the strategy which Greene King has set out in its recent results announcement, that is to focus efforts on developing the brand, enhancing the service offering, training and retaining talent, executing an active estate management strategy, and all under a prudent financial management policy.I look forward to working closely with the management team as we embark on the next stage in the company's growth."
Commenting on the acquisition, Philip Yea, chairman of Greene King, said: "The Greene King board is confident in the long term prospects of the business but believes this offer represents a good opportunity for shareholders to realise value for their investment at an attractive premium, while also ensuring the future success of Greene King for employees, partners, customers and suppliers.
"We are therefore unanimously recommending it to our shareholders."
Nick Mackenzie, chief executive of Greene King, added: "Greene King has a well-invested estate in prime locations, leading brands, a rich history and a talented team of c.38,000 people serving millions of customers across the country every week.
"CKA is an experienced UK investor and shares many of Greene King's business philosophies.
"They understand the strengths of our business and we welcome their commitment to working with the existing management team, evolving the strategy and investing in the business to ensure its continued long term growth."
More by this authorPaul Derrick