Shares in the pub group and brewer surged after it agreed the deal to sell its entire business to CKA Group, the property group run by Hong Kong’s richest family.
The Suffolk business is the UK’s biggest pub owner, with about 2,700 pubs, restaurants and hotels across the country. The deal offered a 51 per cent premium on the value of shares in the brewer, which employs more than 38,000 staff, from Friday.
CKA, which is chaired by Victor Li, the son of Hong Kong’s richest man, has agreed the acquisition through newly formed subsidiary CK Bidco, which is based in the Cayman Islands. Greene King’s deal comes seven months after fellow UK pub group Fuller’s sold its brewing business to Japanese firm Asahi.
CKA said it was particularly attracted to Greene King – which was formerly led by Rooney Anand – because of its “established position in the UK pub and brewing market, freehold and long leasehold property estate, and resilient financial profile”.
George Magnus, economist and non-executive chairman designate of CK Bidco, said: “CKA’s strategy is to look for businesses with stable and resilient characteristics and strong cash flow generating capabilities.
“The UK pub and brewing sector shares these characteristics and we believe that this sector will continue to be an important part of British culture and the eating and drinking-out market in the long run.
“Greene King, being a leading integrated pub retailer and brewer with strong real estate backing, is well positioned to capture the opportunities that lie ahead.”
Nick Mackenzie, chief executive of Greene King, said: “Greene King has a well invested estate in prime locations, leading brands, a rich history and a talented team of around 38,000 people serving millions of customers across the country every week.
“CKA is an experienced UK investor and shares many of Greene King’s business philosophies.
“They understand the strengths of our business and we welcome their commitment to working with the existing management team, evolving the strategy and investing in the business to ensure its continued long-term growth.”
Shares in the company closed 51 per cent higher at 850p yesterday.
Nick Burchett, fund manager at Greene King shareholder Cavendish Asset Management, said: "The Greene King offer is a great reflection of its value. The business has a good portfolio of freehold property and a strong position in the thriving UK pub and brewing sector. And with neither opposition nor competition on the horizon, it seems like it’s a done deal.
"Such a huge move from an international player is certainly encouraging as October 31 looms. It seems that, regardless of the Brexit outcome, investors believe that the UK will still be open for business after the deadline."
But Neil Wilson, chief market analyst at Markets.com, struck a less positive tone. “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.”