Spirit Pubs rejects offer from C&C

Spirit Pubs owns the Chef & Brewer chain

Spirit Pub Company has rejected a takeover offer from cider maker C&C.

The surprise move by Dublin-based C&C puts the pub company at the centre of a bidding war, since it comes just days after Spirit agreed to recommend a rival offer from Greene King.

Explaining its move, C&C said buying Spirit would "transform C&C and enhance long-term shareholder value".

On Monday, Greene King offered 109.5p a share for Spirit, up from an earlier 100p bid that was rejected last month.

The board of Spirit said it would recommend the offer to shareholders if other terms could be agreed.

C&C said that buying Spirit would provide better markets for its alcoholic drink brands, that include Bulmers and Magners ciders, as well as providing cost savings and improved revenue.

A combined business would also give it "a broader range of strategic and operating options".

"C&C's management team is experienced in running a vertically integrated pub and long alcohol drinks business and strongly believe that a combination of C&C's brands with Spirit's high quality, well-located pub estate is the most effective way to optimise shareholder returns in a competitive UK market," C&C said.

Shares in Spirit Pubs opened flat at 106.5p in London on Friday. They rose sharply in late September after Greene King announced its initial 100p-a-share offer.

C&C shares fell 22 cents to €3.70 in early trading in Dublin on Friday.

Suffolk-based Greene King runs 1,900 pubs, restaurants and hotels across the UK, including the Loch Fyne and Hungry Horse chains.

Spirit has 750 managed pubs, mostly in London and the South East, as well as more than 450 leased properties.

C&C has until 17:00 on 20 November to make a firm offer for Spirit or desist, under the terms of the Takeover Code.