Irish cider maker C&C, which owns Scottish drinks giants Tennents, has had its gate-crashing £760 million bid for the Spirit Pub Company rejected.
The move by the Dublin-based company that also produces Magners and Bulmers ciders as well as Caledonia Best, has put Spirit at the centre of a bidding war.
Spirit which has more than 750 managed pubs, mostly in London and south-east England, as well as more than 450 leased properties throughout the UK has recommended a £750m offer from Greene King to its shareholders.
Spirit confirmed it had received a preliminary approach from C&C Group on a possible offer. “The board of Spirit has reviewed the proposal and rejected it,” their statement added.
C&C said buying Spirit would “transform C&C and enhance long-term shareholder value” by virtue of a series of “revenue and cost synergy benefits..
The bidder said that the benefits would include broader strategic and operating options for a combined business, a strengthened route to market for C&C’s long alcohol drinks brands in the on-trade across England and Wales matching the recognition it enjoys in its other core markets, and the creation of a “compelling consumer platform” for its brands.
The Irish company added: “C&C’s management team is experienced in running a vertically-integrated pub and long alcohol drinks business.
“We strongly believe that a combination of C&C’s brands with Spirit’s high quality, well-located pub estate is the most effective way to optimise shareholder returns in a competitive UK market.”
On Monday, Greene King offered 109.5p a share for Spirit, up from an earlier 100p bid that was rejected last month, and the board of Spirit said they would recommend it to shareholders if other terms could be agreed.
C&C said that buying Spirit would provide better markets for their alcoholic drink brands and provide cost savings and improved revenue.
Shares in Spirit Pubs closed up 1p at 107.25p.
They rose sharply late last month after Greene King announced their initial 100p-a-share offer.
In Dublin, C&C shares fell 39 cents to close at 3.53 euros.
Suffolk-based Greene King, which owns Scottish brewers Belhaven, runs 1,900 pubs, restaurants and hotels across the UK, including the Loch Fyne and Hungry Horse chains.
C&C has until November 20 to make a firm offer for Spirit, under the terms of the Takeover Code.