Spirit gets fresh takeover offer from Greene King - UPDATE

20th Oct 2014 07:39

Pub group Spirit has received a fresh takeover offer from rival Greene King at about 109.5p per share. Spirit has told Greene King it would recommend the offer subject to approval of other terms and is in talks with them.Under the revised proposal, Spirit investors would get about 29% of the combined equity of the new enlarged company."The revised proposal remains conditional on, amongst other things, confirmatory due diligence and the recommendation of the board of Spirit," Spirit said in a statement.It added: "There can be no certainty that any firm offer will be made. A further update will be provided when appropriate."As the offer is virtually all paper, both sides can benefit from the synergies, Canaccord Genuity analysts explained in a note to clients. They foresee synergies of £35m resulting from the transaction. There are also potential benefits to be had from the revenue side, they add, such as from the ability to sell Greene King beers into the Spirit estate.The new group, which they have christened Spirit King, will have "higher quality earnings, stronger FCF and better growth prospects than Greene King and Spirit currently offer as separate entities."