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By Muvija M
(Reuters) – The British pub operator Greene King <GNK.L> agreed to offer 2.7 billion pounds of silver to a Hong Kong listed company, founded by the richest man in the territory, who wanted to strengthen its presence in Britain.
The CK Asset offer <1113.HK>, whose founder, Li Ka-Shing, is one of the best-known entrepreneurs in Asia, estimates that the brewer Old Speckled Hen and Abbot Ale is at 850 pence per share, a premium of about 51% to 563 pence at the Friday closing.
CKA already holds a close to 3% stake in Greene King, whose shares jumped 51% to match the price offered and outperform the winners in the market. FTSE 250 capitalization index.
The planned deal comes at a time when Greene King, with 2,700 pubs, restaurants and hotels across the UK, was struggling with an increase in the minimum wage, an increase in real estate prices making the Attractive redevelopment and an abandonment of drinking places in the pubs of young Britons. .
In the United Kingdom, more than 11,000 cafes have closed in the last decade, a fall of about a quarter, according to an analysis conducted in 2018 by the Office for National Statistics. (Https://bit.ly/2DV3793)
Some thought the move could close more ads CKA, where Li Ka-shing retired in May as president and passed on the role to his eldest son, seeking to take advantage of the value of their property.
"Although it's a bottle of champagne for shareholders, there may be less reason to celebrate for customers. I think we can easily expect more bistro closures, "said Neil Wilson, an analyst at Markets.com.
CKA stated that its strategy was to look for companies with stable and resilient characteristics and strong cash flows.
"The company believes that the UK coffee and brewery sector shares these characteristics and that coffee shops will remain an important part of British culture and the market for restaurants and pubs," the group said in a statement.
The deal would be the latest in a series of investments by Li Ka-shing's business empire in the UK, with stakes in the Superdrug retailer, Northumbrian Water and Wales Utilities, West Gas and Felixstow Harbor. .
The directors of Greene King intend to unanimously recommend to its shareholders to vote in favor of the transaction, which will be funded from CKAExisting cash resources.
The news of the transaction helped to lift the shares of rivals JD Wetherspoon <JDW.L> and Marston's <MARCH.L> more than 9%.
(Report by Samantha Machado and Muvija M in Bengaluru, edited by David Holmes)
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