Shares Magazine - August 22, 2019

BIG BIG NEWSNEWS

22 August 2019 | SHARES |  7

Greene King’s £4.6bn bid

is ‘too cheap’ say analysts

Investors should sit tight and see if a better offer comes along

S

ĞǀĞƌĂůĂŶĂůLJƐƚƐƐƵŐŐĞƐƚƚŚĞΘρϬƉƉĞƌƐŚĂƌĞ

ƚĂŬĞŽǀĞƌŽīĞƌĨŽƌƉƵďƐŐƌŽƵƉ'ƌĞĞŶĞ<ŝŶŐ

(GNK) is too low. Investors already holding

ƚŚĞƐƚŽĐŬƐŚŽƵůĚƐŝƚƟŐŚƚĂŶĚĂǁĂŝƚĂŚŝŐŚĞƌŽīĞƌ͕

either from the current suitor or a counterbid.

Hong Kong-based property developer and

ŝŶǀĞƐƚŽƌ<ƐƐĞƚŝƐŽīĞƌŝŶŐάκ͘ςďŶĨŽƌƚŚĞďƵƐŝŶĞƐƐ

ŝŶĐůƵĚŝŶŐŝƚƐůĂƌŐĞĚĞďƚƉŝůĞ͘dŚĞŽīĞƌŝƐƉŝƚĐŚĞĚĂƚ

ĂϮρйƉƌĞŵŝƵŵƚŽŶĞƚĂƐƐĞƚǀĂůƵĞĂŶĚε͘ρƟŵĞƐ

ƚƌĂŝůŝŶŐ/d;ĞĂƌŶŝŶŐƐďĞĨŽƌĞŝŶƚĞƌĞƐƚ͕ƚĂdž͕

ĚĞƉƌĞĐŝĂƟŽŶĂŶĚĂŵŽƌƟƐĂƟŽŶͿ͘

/'ƌŽƵƉ;/'Ϳrecently received a takeover bid

ĨƌŽŵ^ƚŽŶĞŐĂƚĞĨŽƌƚŚĞĞƋƵŝǀĂůĞŶƚŽĨϭϭ͘κƟŵĞƐ

ƚƌĂŝůŝŶŐ/dĂŶĚWƵŶĐŚdĂǀĞƌŶƐǁĂƐĂĐƋƵŝƌĞĚŝŶ

ϮϬϭϳďLJ,ĞŝŶĞŬĞŶĂŶĚWĂƚƌŽŶĂƉŝƚĂůŽŶĂϭϬͲƟŵĞƐ

ŵƵůƟƉůĞ͘ĂŶĂĐĐŽƌĚ'ĞŶƵŝƚLJĂŶĂůLJƐƚEŝŐĞůWĂƌƐŽŶ

ƐĂLJƐ'ƌĞĞŶĞ<ŝŶŐ͛ƐŽīĞƌƌĞĂůůLJŶĞĞĚƐƚŽďĞŽŶĂ

similar level to these other pub companies.

Greg Johnson, analyst at stockbroker Shore

ĂƉŝƚĂů͕ƐĂLJƐερϬƉǁŽƵůĚďĞĂŵŽƌĞĂƩƌĂĐƟǀĞ

takeover price for Greene King in order to secure

shareholder approval.

WĂƌƐŽŶŝŵƉůŝĞƐĂĐŽƵŶƚĞƌďŝĚĐŽƵůĚďĞƉŽƐƐŝďůĞ͕

ƉŽƚĞŶƟĂůůLJĨƌŽŵĂŶŽǀĞƌƐĞĂƐďƌĞǁĞƌǁŝƐŚŝŶŐƚŽ

enter the UK market. He says the most obvious

bidder is Molson Coors, whose brands include

ĂƌůŝŶŐ͕ŽďƌĂĂŶĚŽŽŵĂƌ͘

/ŶǀĞƐƚŽƌƐŇŽĐŬĞĚƚŽŽƚŚĞƌh<ͲůŝƐƚĞĚƉƵď

companies following the Greene King news,

ƐƉĞĐƵůĂƟŶŐƚŚĞLJƚŽŽĐŽƵůĚďĞƚĂŬĞŽǀĞƌƚĂƌŐĞƚƐ͘

DĂƌƐƚŽŶ͛Ɛ;DZ^Ϳ – which is a running Shares

Great Idea – was the biggest riser, jumping 9%.

The Marston’s pub estate is valued at 95p per

ƐŚĂƌĞ͕ĞƋƵĂůƚŽϭϬƟŵĞƐ/d͘DĂƌƐƚŽŶ͛ƐĂůƐŽ

has a beer business which Johnson at Shore Capital

ďĞůŝĞǀĞƐĐŽƵůĚďĞǁŽƌƚŚĂĨƵƌƚŚĞƌςϬƉƚŽΘϬƉƉĞƌ

ƐŚĂƌĞ;εƚŽϭϮƟŵĞƐ/dͿ͘/ƚƐƐŚĂƌĞƐĐƵƌƌĞŶƚůLJ

ƚƌĂĚĞĂƚϭϭϳ͘ϭƉ͘

WƵďĐŽŵƉĂŶŝĞƐĂƌĞƐĞĞŶĂƐĂƩƌĂĐƟǀĞƚĂƌŐĞƚƐĨŽƌ

overseas buyers because the current weakness in

sterling makes them cheaper for a foreign company

ƚŽďƵLJĂŶĚŵĂŶLJĂůƐŽďĞŶĞĮƚĨƌŽŵůĂƌŐĞĂƐƐĞƚͲ

ďĂĐŬŝŶŐ͘&ŽƌĞdžĂŵƉůĞ͕'ƌĞĞŶĞ<ŝŶŐƐĂLJƐΘϭйŽĨŝƚƐ

estate is either freehold or long leasehold.

/ŶĂƐŝŵŝůĂƌĨĂƐŚŝŽŶ͕WƌĞŵŝĞƌ/ŶŶŚŽƚĞůŽǁŶĞƌ

tŚŝƚďƌĞĂĚ;tdͿ is seen as a takeover target due

ƚŽŝƚƐςϬйĨƌĞĞŚŽůĚƉƌŽƉĞƌƚLJĞdžƉŽƐƵƌĞ͘&ƵůůĞƌ

^ŵŝƚŚΘdƵƌŶĞƌ;&^dͿ earlier this year sold its

ďƌĞǁŝŶŐďƵƐŝŶĞƐƐƚŽ:ĂƉĂŶ͛ƐƐĂŚŝĨŽƌάϮρϬŵ͘

^ŚŽƵůĚĂŚŝŐŚĞƌŽīĞƌĨĂŝůƚŽĞŵĞƌŐĞĨŽƌ'ƌĞĞŶĞ

King, investors may be interested to note that

investment bank UBS doesn’t believe CK Asset will

ŚĂǀĞĂŶLJƚƌŽƵďůĞƉĂLJŝŶŐĨŽƌƚŚĞĂĐƋƵŝƐŝƟŽŶ͘/ƚƐĂLJƐ

ƚŚĞƐƵŝƚŽƌŚĂƐ,<Ψρε͘ρďŶ;άς͘ϮςďŶͿĐĂƐŚĂŶĚŝƐ

ĞdžƉĞĐƟŶŐ,<ΨϮϯďŶ;άϮ͘κďŶͿƐŽŽŶĨƌŽŵƌĞƐŝĚĞŶƟĂů

property sales.

/Es^dKZ^ZdKKtE>/^hZ^dK<^

&K>>Kt/E''ZE</E'/

^dK<

^,ZWZ/

&K>>Kt/E''E</Ύ

Marston's 9%

Wetherspoon 8%

Restaurant Group ςй

Mitchells & Butlers** ςй

ΎϭεƵŐƵƐƚϮϬϭεŽŶĞͲĚĂLJĐŚĂŶŐĞ

ΎΎKǁŶƐŵŽƌĞƚŚĂŶςρϬƉƵďƐ

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