Greene King chief says Spirit bid is 'transformational deal'

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.