Spirit Pub Company Plc has rebuffed a takeover approach from C & C Group but gave the Irish drinks maker time to come back with a formal offer.
Spirit Pub confirmed that C & C approached them regarding a possible offer. “The board of Spirit has reviewed the proposal and rejected it” the company said in a statement.
On Friday, the cider maker did not deny the fact and explained that it is still unknown whether a formal offer would be made and on what terms.
This is the second company that shows interest in Spirit Pub. The first one was Greene King Plc., whose offer was a ratio based on Spirit Pubs shares, plus cash.
C & Cs approach was for about 115 pence a share, according to unnamed people familiar with the matter, which values Spirit Pub at £760 million.
The company, with a portfolio including the Magners and Bulmers brands, said it hoped to get access to Spirits network of 1 200 pubs and improve its presence in the U.K. An agreement would benefit both companies as it provides cost synergies and improves access to capital, C & C said.
Spirit board members were reported to have questioned that statement, since the Dublin-based C & C doesnt own any pubs.
“A rejection accompanying the announcement that an approach had been made – without mention of price – does seem perhaps a tad hasty,” said Mark Brumby, an analyst at Langton Capital. “Spirit should have said that it was minded to accept a bid at the right price and, even though the words it used were different, perhaps that’s what it meant.”
However, Spirit Pub said on Monday that it is willing to accept the offer made from Greene King, which would create the biggest managed pub group in the UK. The deal would give Spirit Pubs shareholders 29% of the new company.
C & C has until November 20th to make a firm offer.
Spirit Pub Company Plc gained 3.91% on Thursday and closed at GBX 106.25 in London. On Friday the stock gained 0.71% to trade at GBX 107.00 at 12:18 GMT, marking a one-year increase of 47.08%. The company is valued at GBP 701.85 million. According to the Financial Times, The 7 analysts offering 12-month price targets for Spirit Pub Company PLC have a median target of GBX 109.50, with a high estimate of GBX 110.00 and a low estimate of GBX 80.00. The median estimate represents a 3.06% increase from the last close price of GBX 106.25.
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