£4.6bn beer deal

Hong Kong’s richest man buys Belhaven in swoop on Greene King


Belhaven: part of the Greene King company

Hong Kong billionaire Li Ka-shing’s property investment firm has agreed to buy the UK’s Greene King pub group, which includes Scottish brewer Belhaven, in an all-cash deal valuing the company at £4.6 billion.

CK Asset Holdings will pay shareholders 850p per share, representing a premium of 51% compared with Friday’s closing price. The deal comprises £2.7bn in cash and £1.9bn of debt.

Greene King, which is based in Bury St Edmunds, Suffolk, was founded 220 years ago and its beers include Abbot Ale, Old Speckled Hen and Greene King IPA.

George Colin Magnus, chairman designate of CK Bidco, which is the CK Asset vehicle that has agreed to acquire Greene King, said its 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.”

Mr Li, a 91-year old property tycoon is also Hong Kong’s richest man, though he has suffered paper losses estimated at around $3bn since the end of July as the unrest in the city has hit the value of his holdings.

Nik Antona, national chairman of good beer group CAMRA, issued a note of caution. He said: “The news that Britain’s largest pub and brewery company has been sold to an international asset company is very concerning for our beer scene. 

“We are always wary of one company controlling a large share of the market, which is seldom beneficial for consumers. Greene King has been in operation for over 200 years and it is a very sad day to see such a well-known, historic and respected name exit the brewing and pub business.

“We hope that Greene King will continue its operations as normal without any disappointing changes. We will be calling on the new owners to retain the current pub portfolio to safeguard thousands of pubs and jobs across the country.”

Comment: Is this an asset stripping exercise?

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