Greene King chief says Spirit bid is 'transformational deal'

By James Wallin, M&C Report

- Last updated on GMT

Related tags: Greene king, East anglia

Rooney Anand said he would 'continue to trim the tail' of the leased and tenanted estate
Rooney Anand said he would 'continue to trim the tail' of the leased and tenanted estate
Greene King chief executive, Rooney Anand, has described the company’s bid for Spirit Pub Company as a “transformational deal” that will “create the UK’s leading pub company”.

Last week, Spirit’s board agreed to recommend a formal offer from the Hungry Horse operator valued at £773.6m.

The bid, which would create a 3,127-strong company, would mean Spirit shareholders holding 28.9% of the combined group and Greene King shareholders 71.1%.#

Speaking to investors after last Tuesday’s announcement, Anand said there were no plans for a significant increase in churn of the Spirit leased and tenanted estate but said there were opportunities to “simplify the brand portfolio”.

He also said the deal would not quell Greene King’s acquisition ambitions, saying that while 2015 would be dominated by the Spirt deal, he would still be urging his property team to pursue targets for late 2016.

He praised the Spirit estate and said the acquisition would complement the regional strengths of both companies, with Greene King dominant in East Anglia and in Scotland, and Spirit strong in the Midlands and the north-east. The combined company would represent a 21% share of the market in the south-east.

Brands and formats

He said he would examine “clusters where we could look at the best brands and formats to get more simplification”.

He showed analysts a slide showing how brands from the two companies operated in the same space.

Anand claimed he was not predicting an immediate increase in churn of the leased and tenanted estate, although he stres-
sed: “We will continue to trim the tail.”

“The Spirit estate’s yield is superior and many of their tenanted pubs are ex-managed. There’s an opportunity to bring the estates together and extract a lot of value.”

A rival bid by Magners producer C&C is still possible, with a deadline of 20 November for a formal offer to be tabled.

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For the record

Posted by Interested Observer,

JP: I am a taxpayer. But just as I'm not a fan of the health lobby telling me to drink less, I'm not a fan of telling others what to eat either.

I'm not sure of your point on shareholders. They all get the same price for the shares when (if) the merger happens. And of course it's the shareholders who'll approve the deal.

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Transformational Deal ?

Posted by JP,

@ IO: A company does put its shareholders first but guess what, when Spirit wanted shares post demerger from Punch who bought them, let me give you a guess, their employees, HQ and pub staff! And getting bought out doesn't have to be the be all and end all. If the Spirit board were truly business minded then why not make their business the best rather the sell it as soon as the books look good (by the way that includes selling some London pubs for some silly amounts).

Yes a good proportion is "deep fried crap" but I guess that doesn't matter when kids and adults get fatter and our NHS has to tackle the issue. Guess you aren't a taxpayer or don't care about the health implications of the £1m business this joke for an excuse of food represents.

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Not sure why....

Posted by Interested Observer,

...anyone's surprised that a Company puts the interests of its shareholders at the forefront.

Having said that, the Spirit peoples' heads must be spinning with all the changes of ownership and job uncertainty they've gone through in a fairly short space of time.

"Deep fried crap" maybe, but it's being consumed at the rate of about £1m worth per pub last year. Give the people what they want perhaps?

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