Heineken NV teamed up with Patron Capital to buy U.K. pub operator Punch Taverns Plc for 402.7 million pounds ($502 million), edging out a co-founder of the company who was also preparing a bid.
Patron will pay 180 pence a share in cash, and Heineken in turn will pay the investment company 305 million pounds for 1,900 pubs, Punch and Heineken said Thursday in separate statements. Punch said its three largest shareholders, who together control 52 percent of its stock, support the bid. The stock rose 7.8 percent to 190.75 pence at 2:35 p.m. in London.
The offer is 40 percent higher than the closing price Tuesday, the day before Punch disclosed Heineken’s interest and said co-founder Alan McIntosh was also considering a 185 pence-a-share bid through Emerald Investment Partners Ltd.
The purchase would add to the 1,049 taverns Heineken controls in the U.K. through its Star Pubs & Bars business. Punch, which loaded up on debt just as the recession hit, hasn’t recorded annual revenue growth since 2007. The stock has fallen 97 percent since a peak that year as U.K. bars struggle with cheaper supermarket booze, a smoking ban and restrictive drinks-purchasing agreements.
“Today’s announcement is a huge vote of confidence in the great British pub,” David Forde, managing director of Heineken’s U.K. business, said in the statement.
Patron, established in 1999, will keep some of Punch’s taverns, and said it will reinvest in them with the proceeds of the sale to Heineken.
Goldman Sachs Group Inc. advised Punch, which said it didn’t solicit the bid. Nomura International advised Heineken and Rothschild advised Patron.
Heineken said it will become the third-largest pub operator in the U.K. through the purchase, which will add to earnings in the first year after it’s concluded. The brewer’s stock fell 0.7 percent to 70.40 euros in Amsterdam.
News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.
