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* Marston's gets unsolicited proposal
* Co says it will evaluate the proposal
* Shares jump as much as 30.5%
(Update shares, adds analyst comments, background)
By Tanishaa Nadkar
Jan 29 (Reuters) - Pub group Marston's, brewer of
Pedigree, Hobgoblin and Lancaster Bomber beer, has caught the
eye of U.S. Platinum Equity Advisors which is looking to make a
cash offer for the two-century-old firm, the British company
said on Friday.
Shares in Marston's jumped 16.9% to 87.7 pence by 1357 GMT
after news of the unsolicited non-binding approach. The firm was
valued at about 473 million pounds ($649 million) at closing
prices on Thursday, according to Refinitiv Eikon data.
The pubs sector has been in decline for many years and most
recently has been hit by forced closures to contain the spread
of the new coronavirus, along with restaurants and other leisure
businesses. The company's shares fell 40.6% in 2020.
Marston's, which runs around 1,400 pubs, said it would
evaluate the unsolicited proposal with its advisers.
Last year it revealed plans to cut around 2,150 jobs and
called for more government support as it posted an annual loss.
It could become the latest British pub operator to be taken
private, after Greene King agreed to a 4.6 billion pound
takeover from Hong Kong's CK Asset in 2019 and Ei
Group was bought by Slug and Lettuce owner Stonegate owner last
year.
Stifel analyst Mark Irvine-Fortescue said Marston's was
trading at a "modest" 14% discount to its net asset value but if
the once family-owned firm was taken private it would face less
pressure to reduce debt and resume dividend payments.
"This news should serve to highlight the attractions of the
sector, and underpin valuations during the COVID recovery
phase," the analyst said.
Bloomberg first reported https://bloom.bg/2MyjrSv the
potential deal earlier on Friday and said the proposal includes
taking the company private, citing people with knowledge of the
matter.
The U.S. private equity firm did not immediately respond to
a Reuters request for comment.
"We see positive implications across the sector, especially
for M&B (Mitchells & Butlers)," Jefferies analysts said,
referring to another potential bid target and picking out M&B as
particularly undervalued.
Shares in rival J D Wetherspoon were up 1.3%, while
M&B rose 2.4% around.
Under stock market rules, Platinum now has until close of
play Feb. 26, to make a formal offer.
($1 = 0.73 pounds)
(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Maju
Samuel and Elaine Hardcastle)
