* To pay 180 pence a share, 40 pct above Tuesday's close
* Punch has received a higher rival proposal, but no bid
* Punch shares jump to 2-year high on hopes of bidding war (Adds Heineken rationale, possible counter bid)
By Rahul B and Philip Blenkinsop
Dec 15 (Reuters) - Heineken NV and investmentpartner Patron Capital have struck a 403 million pound ($500million) deal to buy and break up Punch Taverns, in amove that will make the Dutch brewer Britain's third-biggestpubs group.
The companies said on Thursday Punch shareholders wouldreceive 180 pence per share in cash, a premium of more than 40percent to Punch's closing price on Tuesday, a day before apotential deal was first reported.
However, Punch shares leapt to a 2-year high of 198.75pence, suggesting investors are hopeful of a higher offer.
Punch said on Wednesday it had received two takeoverapproaches, a possible 174 pence per share offer from Heinekenand its partner, and a higher 185 pence per share proposal fromEmerald Investment Partners, founded by Alan McIntosh, the pubgroup's former finance director. {nL5N1E93QW]
It was not immediately clear how Emerald would respond. Itdeclined to comment.
Punch said on Thursday that Emerald's proposal wasconditional on financing, ongoing due diligence and there couldbe no certainty of a firm offer.
Heineken, which makes Amstel, Sol, and tequila-flavouredDesperados alongside Strongbow cider and its green-bottledHeineken lager, will pay 305 million pounds to buy the majorityof Punch's pubs, nearly tripling its existing UK estate.
The Dutch firm is unusual among major brewers in owningpubs, but believes they ensure direct contact with consumers,help the testing of new products and offer better margins in theUK than selling beer or cider.
Punch said the deal with Heineken and Patron had the supportof its top three investors representing about 52.3 percent ofits existing share capital, but that their commitment wouldlapse if there was a rival offer of 200 pence a share or more.
Heineken and Patron referred to their offer as final, butsaid it could be increased in the event of a competing bid.
Punch is currently Britain's second-biggest pubs group, butits estate will be split with Heineken taking 1,900 pubs andreal estate investor Patron more than 1,300 sites.
Heineken currently has 1,049 pubs, mostly bought from RoyalBank of Scotland in 2011.
The Dutch firm said it would refurbish the acquired pubs andensure they could sell food. It expects to benefit fromeconomies of scale and increased sales of its beer and cider.
Heineken has made efforts to increase its emerging marketpresence in recent years with purchases in Mexico and Asia, butremains Europe's leading brewer.
Punch is being advised by Goldman Sachs, whileHeineken is being advised by Nomura and DLA Piper.
($1 = 0.8057 pounds) (Reporting by Rahul B in Bengaluru and Philip Blenkinsop inBrussels; Additional reporting by Martinne Geller in London;Editing by Jason Neely and Mark Potter)
