Greene King and Spirit strike takeover deal

Pub giant Greene King has struck a deal to buy rival firm Spirit Pub Company, valuing the company at around £773.3m or 115 pence per share.

The agreement ahead of today's 5pm extended deadline comes just weeks after news of Greene King's takeover aims first surfaced. The original offer of 100 pence per share on 23 September was upped to 109.5 pence per share on 20 October.

The boards of the two companies have agreed that Spirit shareholders will receive 0.1322 Greene King shares per Spirit share, plus 8p in cash, payable as a dividend.

This means that Greene King shareholders will have about 71.1% of the combined business, while Spirit holds the remaining 28.9%. Shareholders will now vote to on the agreement struck by directors.

Greene King said it expects the takeover to deliver around £30m in cost savings a year, with the one-off cost to achieve that anticipated to be £25m.

Commenting on the deal, Greene King chief executive Rooney Anand said the agreed offer "represents a fair price for Spirit's high quality estate that fits well within the Greene King portfolio on both a brand and geographic basis, expanding our presence in the attractive London and South East area".

Meanwhile Walker Boyd, chairman of Spirit, said the agreed offer would create the "UK's leading pub group with further opportunities for growth and accelerating progress towards our objective of delivering attractive returns for investors, flawless operational execution for guests and compelling development opportunities for our people".

Spirit Pub Company has 770 managed pubs, including the Chef & Brewer, Taylor Walker and Fayre & Square brands, while Greene King has 1,000 managed pubs and around 900 tenanted and leased pubs.

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