Hong Kong's CK Assets Holdings has announced that its takeover bid for Britain's largest pub and brewery firm Greene King has been accepted by shareholders.
The Suffolk-based pub chain and brewer is the latest to be bought in a wave of consolidation in the sector.
In July 2018, Greene King, which brews beers including Greene King IPA, Old Speckled Hen and Abbot Ale, cut 100 jobs in its Bury St Edmunds and Burton upon Trent offices due to a challenging year of rising costs, increased competition and poor weather.
'It was a reasonably generous offer'
BBC Radio 5 Live
This morning, shareholders of Britain's largest pub and brewery firm,Greene King, will be voting on the proposed acquisition of the company by Hong Kong's CK Asset Holdings for £4.6bn.
"It was a reasonably generous offer," Laura Foll, fund manager for UK equity income at Janus Henderson Investors told BBC Radio 5 Live's Wake Up to Money programme.
"I think there was a feeling amongst some shareholders that it could have been slightly higher - it wasn't a particularly high premium to tangible book value...but I still think the vote will go through quite comfortably."
However she added that the breweries that have not yet been taken over in the UK would now be likely get a premium bid because there are so few left that they will have a "scarcity value".
Greene King shares hit despite strong sales growth
Shares in brewer and pub operator Greene King have fallen more than 7% this morning, which might seem a touch harsh given that the company is predicting full-year profits ahead of analysts' forecasts.
The company, which brews beers including Greene King IPA, Old Speckled Hen and Abbot Ale, expects annual pre-tax profits to be between £244m and £247m,
Greene King said like-for-like sales in the year to 28 April were up 2.9% at its Pub Company, and warm weather over the Easter weekend helped to lift sales by 4.6%.
However, it appears the market had been hoping for even better news.
Sophie Lund-Yates, equity analyst at Hargreaves Landsdown, said: “By
most standards, Greene King’s results this morning would be seen as good news,
with strong performances across the key Pub Company and Pub Partners divisions.
Perhaps more crucially for investors, the group confirmed troublesome cost
inflation headwinds were being kept under control.
seems though that someone, somewhere is disappointed, given the discouraging
market reaction following the announcement.
"Weak numbers last year due to
disruption caused by the ‘Beast form the East’ are flattering numbers this
quarter, and we suspect the warm weather over Easter had raised hopes this
year’s trading would be even better."
Christmas sales bubble up 10.9% at Greene King
Greene King has also reported "strong trading" over the Christmas period.
The pub company said Christmas and New Year sales soared 10.9% and it achieved record Christmas Day sales of £7.7m.
In the last 36 weeks, sales at its 2,798 pubs have climbed 3.2%, the company said.
It said it remains on course to dispose of 100-110 pubs and open around nine new pubs in the current financial year.