(Alliance News) - Greene King PLC said Monday it has accepted an 850 pence cash offer from Hong Kong-listed property developer CK Asset Holdings Ltd.
Shares in the FTSE 250-listed pub retailer jumped 50% following the announcement, rising to 843.80p each in afternoon trade.
The offer values Greene King's issued share capital at GBP2.7 billion, giving the firm an enterprise value of GBP4.6 billion.
"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," said Greene King Chair Philip Yea.
The offer represents a 51% premium to Green King's closing price of 563p on Friday. The offer also represents a premium of 43% to the adjusted three month volume weighted price and a 40% premium to the six month volume weighted price.
CK Asset said the UK pub and brewing sector will "continue to be an important part of British culture". CK Asset has previously invested in the UK pub sector, owning a small portfolio of freehold pubs, all of which are leased to Greene King.
CK Asset Non-Exec Chair Designate George Magnus 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."
Greene King Chief Executive Nick Mackenzie added: "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."