Greene King agrees £2.7 billion sale to CK Bidco
Suffolk brewer and pub group Greene King is being sold for £2.7 billion to Hong Kong real estate giant CK Bidco.
The deal values Greene King at 850p a share and hands shareholders a thumping payout. At the close of UK trading today Greene King’s share price had rocketed 287p – almost 51 per cent. Its 2018 revenues were over £2.1bn.
Based in Bury St Edmunds, Greene King is the UK's biggest pub owner with around 2,700 retail outlets across the country. The cash deal values the company at a substantial premium based on the stock value in recent months.
Both boards are unanimously recommending acceptance of the bid but the EC also has to give its approval.
CK Bidco is a newly incorporated wholly-owned indirect subsidiary of CKA, which is a limited liability company incorporated in the Cayman Islands, registered in Hong Kong, and listed on the main board of the Hong Kong Stock Exchange.
It was founded by Hong Kong’s richest man, Li Ka Shing, who has invested millions in Cambridge BioMedTech enterprises, encompassing cancer research and other healthcare technology areas.
CKA is a long-term and strategic investor in stable, profitable and cashflow generating businesses that benefit from real estate backing. It believes that the UK pub and brewing sector shares these characteristics and that pubs will continue to be an important part of British culture and the eating and drinking out market.
It has invested previously in the UK pub sector and owns a small portfolio of freehold pubs, all of which are leased to the Greene King Group.
Greene King’s own substantial property estate and financial solidity were other attractions for the buyer. The acquisition is expected to complete in the fourth quarter of 2019.
Greene King chairman Philip Yea, 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.”
Chief executive Nick Mackenzie added: “Greene King has a well-invested estate in prime locations, leading brands, a rich history and a talented team of around 38,000 people serving millions of customers across the country every week.
“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.”