By Ian Walker
LONDON--Punch Taverns PLC (PUB.LN) said Thursday it had agreed to a 180 pence a share offer from Heineken N.V. (HEIA.AE) and private-equity company Patron Capital Advisers LLP in a deal that values the U.K.'s second-largest pub chain at 402.7 million pounds ($501.6 million), higher than that indicated on Wednesday.
As part of the proposal, Heineken will buy Punch A, one of the companies two segments, and certain pubs from Patron immediately after the completion of Patron's purchase of Punch. Punch is structured into A and B segments, with Punch A made up of around 2,000 pubs and Punch B holding more than 1,000.
Separately. Heineken said it would pay GBP305 million for the shares in Punch A and assume intercompany debts due from Punch A to Punch Taverns PLC. The debt is estimated at around GBP897.3 million.
The offer price is a 40% premium to Punch's closing share price of 128.5 pence Tuesday and more than the indicated level of 174 pence Wednesday. Patron said the offer, which has the support of shareholders owning 52.3% of Punch's issued share capital, is final and won't be increased.
"While the board didn't solicit this offer for the company, we believe this is a good outcome for shareholders as the offer provides cash certainty at a significant premium," said Punch Chairman Stephen Billingham.
Stefan Orlowski, Heineken regional president for Europe, said: "This transaction is a significant step forward in our strategy to unlock value in the U.K. pub market."
"Leveraging our extensive experience will enable us to realize increased potential from the pubs we are acquiring and deliver positive returns to our shareholders," he added.
Punch shares at 1320 GMT were up 10 pence, or 5.65%, at 187 pence.
On Wednesday, Punch confirmed it had been approached by Patron and Heineken, as well as by Emerald Investment Partners Ltd. regarding a possible offer for 185 pence per share. The Emerald proposal would depend on arranging committed financing, amongst other factors, it said.
Write to Ian Walker at email@example.com; @IanWalk40289749
(END) Dow Jones Newswires
December 15, 2016 08:59 ET (13:59 GMT)
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