Pub groups Green King and Spirit are still pursuing their £774m merger despite the sudden end of the beer tie system hitting share values.
As MPs voted to end the system on Wednesday, allowing pubs to negotiate five-yearly rent reviews and to buy beer from their owners’ rivals, Greene King’s shares dropped by 35.5p or 4.5% to 750.5p, reducing the value of its cash and stock takeover of Spirit. Yesterday the share price rebound 7p to 757.5p.
Tenanted pubs currently on a beer tie would compose 41% of the merged company’s 3,100 pubs.
The British Beer & Pub Association, along with the UKs biggest pub landlords, Enterprise Inns, Hreene King, Punch Taverns and Marstons, warned on Wednesday that the decision could lead to the closure of 1,400 pubs and the loss of 7,000 jobs.
The changes are due to come into effect in 2016.
Meanwhile, pub tenants argue that the end of the tie system is nothing but good news for the industry.
Young’s announced a 26.2% rise in profits, to £18.8m on turnover up 8% to £116.6m, for the six months to September.
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