CKA buys UK pub chain Greene King for £2.7bn
Hong Kong property developer CK Asset Holdings (CKA) has announced it is to acquire UK brewer and pub chain Greene King.
Via a subsidiary, CKA is to pay £8.50 for each share. The total value of the transaction was £2.7bn, in turn valuing the Greene King business at £4.6bn.
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."
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In its press release the company suggested its rationale for the purchase was based around the stability of the UK pub industry. CKA is already an owner of a number of UK pubs, all of which it leases to Greene King.
George Colin Magnus, Chairman of subsidiary 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.”
The deal is subject to the usual closing conditions, including approval by the shareholders of each company. Both boards are unanimous in their support for the transaction. Also pending is a decision from the European Commission.
