Pub and hotel operator Old English Inns is set to be taken over by brewer Greene King in a £59.1m deal, it emerged today.
The proposed transaction will see Greene King, which brews IPA and Old Speckled Hen, take over Old English’s 136 outlets, the bulk of which are in the south of England.
Greene King, based in Bury St Edmunds, Suffolk, currently has 1,561 managed and tenanted pubs.
David McCall, Greene King’s chairman, said: “We believe this acquisition is a good strategic fit for us and that we can drive further growth from it.”
Old English announced last month it was in possible takeover talks but did not disclose who with.
Chairman Eric Walters said today: “After careful consideration, the Old English Inns board has concluded that a sale of the business to Greene King is in the best interests of the business from both a commercial and strategic point of view.”
Shares in Old English soared 26% following news of the deal, which still requires shareholder approval.
Old English, based in New Barnet in north London, sells drinks, food and accommodation from predominately rural and market town locations.
The group has been hit in recent months by the autumn floods, the fuel crisis and the foot-and-mouth outbreak and in May reported a drop in full-year operating profits, from £10.1m to £7.3m.
A Greene King spokesman said that should the deal go through, the group did not plan to close any Old English outlets and that job losses were unlikely.
The 150p-per-share proposed deal is the latest in a string of consolidating moves in the brewing and pubs industry.
It also follows on from last month’s defeat of pub operator Pubmaster’s £485m hostile bid for brewing group Wolverhampton & Dudley.
EGi News 07/09/01
