United Kingdom

Britain's biggest pub operator Greene King sold to Hong Kong tycoon for £3bn

Hong Kong’s richest man is buying Britain’s biggest pub operator and brewer for £2.7billion.

Shares in Greene King soared more than 50 per cent after it recommended an all-cash bid by CK Noble, a subsidiary of CK Asset Holdings which is owned by billionaire Li Ka-shing.

CK – which also owns Superdrug and mobile network Three – is listed and headquartered in the Chinese city but is domiciled in the tax haven of the Cayman Islands.

Shares in Greene King, which owns brands IPA and Abbot Ale soared over 50 per cent

 Li, 91, stepped down as chairman last year and handed the reins to his son, Victor Li.

Including debt, CKA’s 850p-per-share offer gives Greene King a value of £4.6bn.

Greene King was founded in 1799 by 19-year-old Benjamin Greene in Bury St Edmunds, Suffolk, where its head office is still located. It operates more than 2,700 pubs, restaurants and bars and also owns brands such as Hungry Horse, Chef & Brewer and Farmhouse Inns.

The firm’s two breweries generated almost 13pc of Greene King’s £1.7bn sales last year, churning out beers including Old Speckled Hen, Abbot Ale and Greene King IPA.

Plans for a takeover come after former chief executive Rooney Anand quit earlier this year following a 14-year stint at the firm.

CK is understood to have first approached Greene King shortly after his departure.

The firm has been shutting pubs in an effort to slash overheads and closed more than 110 in the year to April 28.

 Pubs have been struggling with a combination of rising-cost pressures such as rents, business rates and the higher minimum wage. Almost 1,000 pubs were forced to close last year, according to property firm Altus Group.

Analysts warned the purchase could lead to further cutbacks.

Neil Wilson, chief market analyst at online trading platform Markets.com, said: ‘While it’s a bottle of champagne for shareholders, there may be fewer reasons to celebrate for patrons.

‘I think we can comfortably expect more pub closures.

‘It’s a whopping premium that implies CKA sees significant value in the property portfolio. For the battered pub trade, it’s clear the real value lies in the property.’

Greene King’s deal comes just months after rival Fuller’s sold its brewing business to Japanese firm Asahi for £250million.

As Greene King rose 51 per cent, or 287p, to 850p, other firms in the pub sector also benefited with Marston’s up 9.1 per cent, or 9.6p, to 115p and Wetherspoons rising 7.6 per cent, or 111p, to 1582p.

Nick Mackenzie, chief executive of Greene King, said: ‘CKA is an experienced UK investor and shares many of Greene King’s business philosophies.’

Greene King shareholders must approve the takeover if it is to go ahead.               

Football news:

Ighalo's agent confirmed that Manchester United are close to extending the player's loan until January
Celtic can sign Claudio Bravo, foster or Joe HART
Harry Kane: Tottenham must win 7-8 games to qualify for the Champions League
Jankauskas on Mourinho: Smart, witty and strong. First of all, the spirit
Balotelli wants Brescia to return him to the team or pay compensation. In the summer, the player will change clubs
Witzel on Sancho: He is one of the best players of his generation
Favre about Mike Sancho: I didn't see Anything – I can't judge. I don't know why he did it