Spirit said it had reviewed and rejected C&C’s approach, believed to be 115p a share of which at least a third would be in cash, which would value the pub operator at £760m, but the drinks firm has until 20 October to make a further bid.
C&C said that the acquisition of Spirit, “one of the highest quality pub estates in the UK”, would transform the company and enhance long-term shareholder value through revenue and cost synergy benefits and a broader range of strategic and operating options for a combined business.
'Compelling platform'
It said that it would also provide a strengthened route to market for C&C’s long alcohol drinks brands in the on-trade across England and Wales matching the recognition it enjoys in its other core markets.
It believes it would provide a compelling consumer platform for C&C’s brands in some of the best locations throughout England & Wales, in particular London; and give the company access to improved procurement terms for a combined business.
C&C said that its management team is experienced in running a vertically integrated pub and long alcohol drinks business and that it strongly believes that a combination of C&C’s brands with Spirit’s high quality, well-located pub estate is the “most effective way to optimise shareholder returns in a competitive UK market”.
Bid deadline
Sir Brian Stewart, C&C’s chairman, is a former chief executive of Scottish & Newcastle (S&N), while Stephen Glancey, chief executive, and Kenny Neison, financial director, also worked at S&N.
In accordance with Rule 2.6(a) of the Code, C&C is required, by not later than 5pm on 20 November 2014, to either announce a firm intention to make an offer for Spirit in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer.
Earlier this week, Spirit said it was willing to recommend a revised takeover offer from Greene King of approximately 109.5p, which values the company at c£723.5m.