Greene King building to London 2012

The group's agreed cash offer for smaller rival Capital Pub Company trumps a 54m offer from Fuller, Smith & Turner. The inclusion of debt takes the bid to 93m.

The 235p-per-share offer price includes a final dividend of 2.25p per share. The offer represents a 51 per cent premium to the closing price of 155.5p on 16 June, the last dealing day prior to the commencement of the offer period. By last night it had acceptances representing 46.1 per cent of the company.

The deal would mark Greene King's third major pub group acquisition this year following the takeovers of Realpubs and Cloverleaf for a combined 108m.

The firm, which owns the Dunbar-based Belhaven brewery and the Loch Fyne chain of restaurants, is looking to grow in London, where Capital has 34 pubs.

The combined business would have about 250 pubs within Greater London.

Greene King chief executive Rooney Anand expects the sites to do especially well as the 2012 Olympics approaches. In general, pubs in London have performed better than those in other parts of the UK during the downturn.

"The proposed acquisition represents another firm step as we continue to expand our presence in London," said Anand.

"We intend to combine it (Capital Pubs] with our recently acquired Realpubs business."

Capital said recent trading had been strong with 22 pubs open for at least a year generating like-for-like revenues growth of 6.5 per cent in the past 15 weeks.

John Beaumont, an analyst at Matrix, which has a "buy" recommendation on Greene King shares, said: "Overall (assuming the takeover completes successfully) we believe this deal is both strategically important and financially attractive for Greene King."

But analysts at Credit Suisse noted: "Whilst we acknowledge Greene King is making some sensible deals within the sector, we have a preference for Marston's."