Canaccord Genuity lowers Greene King to 'hold' following CK Noble offer

20th Aug 2019 11:00

(Sharecast News) - Analysts at Canaccord Genuity raised their target price on British landlord Greene King on Tuesday, but lowered their recommendation for the firm's shares from 'buy' to 'hold' following the previous session's accepted offer from CK Noble.
Shares of Greene King surged on Monday aftr the pub group agreed to be bought by a subsidiary of CK Asset Holdings, the flagship of the CK Hutchison Group, for 850.0p a share in cash - the broker's new target price.

Following the announcement, the Canadian broker took a fresh look at its numbers on Greene King, pointing out that the offer was at "a substantial premium" to its previous 670.0p share price target.

But Canaccord Genuity wondered if there was still a possible counter-bidder to be flushed out, noting that it had long held the view that the major asset-intense pub companies were potential targets for major brewers wishing to enter the UK market, with the most obvious bidder being Molson Coors.

"If any brewer is interested in extending its position in the UK market, they need to hurry up," said Canaccord, which also pointed out that somewhat unsurprisingly, the share prices of other pubcos, Wetherspoon, Marston's and Mitchells & Butlers all reacted positively to the news.