UK: Heineken wins battle for 1,900 pubs

Punch Taverns, a pub and bar operator in the United Kingdom, with around 3,350 leased and tenanted pubs, has agreed to a takeover by Heineken of £402.7m ($497.2m). According to the offer, the Punch outlets are to be split between Heineken and Patron Capital, a real estate investment fund. While Heineken is taking the lion’s share of 1,900 pubs, Patron stays with the rest.

Heineken is already the largest brewer by volume in the UK and operates 1,100 leased and tenanted pubs through its Star Pubs & Bars division. Together with 1,900 new pubs, Heineken would be the UK’s third-largest pub group after Greene King and Enterprise Inns.

Although Heineken has the backing of Punch’s three largest shareholders Glenview Capital, Avenue Capital and Warwick Capital Partners representing 52.3 per cent of the group’s shares, the deal is still dependent on the backing of 75 per cent of a company’s independent shareholders. Although the decision of the antitrust authorities is pending.

Stephen Billingham, chairman of Punch, said that the company accepted Heineken’s 180p-a-share cash offer despite a higher competing 185p-a-share offer of Emerald Investment Partners, the private investment fund of Punch’s co-founder Alan McIntosh. “The higher offer did not have maturity in the context of financing — there was no certainty,” he said.

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