CK Asset Holdings to buy Greene King for 850p a share

British pubs group Greene King reported a 2 percent increase in full-year profit on Thursday as a 31 percent rise in food sales offset the impact of a smoking ban

British pubs group Greene King reported a 2 percent increase in full-year profit on Thursday as a 31 percent rise in food sales offset the impact of a smoking ban

British pubs operator Greene King has agreed to a 4.6 billion pounds ($5.6 billion) bid from a Hong Kong-listed company founded by the territory's richest man Li Ka-Shing, which said it was seeking to increase its United Kingdom presence even as Brexit looms.

"The Greene King board is confident in the long term prospects of the business but believes this offer represents a good opportunity for shareholders to realise value for their investment at an attractive premium, while also ensuring the future success of Greene King for employees, partners, customers and suppliers", said chairman Philip Yea.

News of the deal lifted shares in rivals JD Wetherspoon JDW.L and Marston's MARS.L by more than 9%.

A Hong Kong multinational is poised to snap up Bury St Edmunds-based pubs and brewery giant Greene King as part of an eye-watering £2.7bn deal.

CK Asset Holdings Ltd, founded by Hong Kong's richest man Li Ka-Shing, today agreed to buy pub operator Greene King Plc.

Greene King's directors intend to unanimously recommend shareholders vote in favor of the deal, which will be funded from CKA's existing cash resources.

However, Greene King, which replaced its long-time boss previous year, in June posted a higher than expected 1.6 percent rise in annual adjusted profit before tax to 246.9 million pounds.

The company's beer, Greene King IPA, increased in popularity by 1,600 per cent in China in 2015 after President Xi Jinping was pictured sharing a pint with former prime minister David Cameron.

The country became so enamoured with the pub that Chinese investors eventually bought it for an undisclosed sum and it became a tourist attraction.

'Within two days of the great bar scene ... people from all over China were ringing: agents, restaurants, bars, hotels.

George Colin Magnus, non-executive chairman designate of CK Bidco, said: "CKA's strategy is to look for businesses with stable and resilient characteristics and strong cash flow generating capabilities".

"The UK pub and brewing sector shares these characteristics and we believe that this sector will continue to be an important part of British culture and the eating and drinking out market in the long run", he said.

'Greene King, being a leading integrated pub retailer and brewer with strong real estate backing, is well positioned to capture the opportunities that lie ahead'.