Earlier this morning an £2.7 billion agreement was reached for the takeover of Greene King (LON: GNK) by Hong Kong’s richest man Li Ka-Shing.
As negotiations have moved forward, the agreement has concluded with 99.38% of shareholders in favor.
Phillip Yea, the Greene King Chairman described this takeover. “The board welcomes shareholders’ approval of CKA’s offer to acquire Greene King”
He added “As previously set out we believe CKA’s long-term vision for Greene King, supported by our established position in the pub industry, high-quality estate and resilient financial profile, is in the best interests of employees, tenants, customers and suppliers”
Nick Mackenzie, chief Executive of Greene King was optimistic about the moving commenting that CK Asset Holdings was an “experienced UK investor and shares many of Greene King’s business philosophies”.
With the history of Greene King enduring over 200 years, the takeover represents a change of both vision and strategy for the British Pub Chain and a dependency on Foreign Investment to survive.
As this deal enters its completion phase, this is the second biggest inbound deal of the year valued at £4.6 billion, inclusive of debt commitments. This seconded the £6 billion move for Alton Towers by Blackstone (NYSE: BX) and The Canada Pension Plan Investment Board.
With the international takeover of Greene King, there has been some fear about job security for 31,800 employees working in 3,100 pubs nationally.
Interestingly, since the takeover was formalized the share price of Greene King has shifted. Yesterday, its price was listed at 8,473p and today there has been a rise of 0.07%.
Greene King has been reporting strong sales figures in the second quarter of this year, with like-for-like sales of 15.3%, however share prices have been volatile.
Even with strong like-for-like sales, and 3% increases in profits at the end of last year, there have been moments of decline. In April, the sudden departure of CEO Rooney Anand caused a slip of -7.52%.
The move by the Hong Kong billionaire Li, adds another reputable firm to his list of assets including Three Mobile, Superdrug Pharmacies & many commercial assets.
There has been little reassurance to those employed by Greene King as to the status of future employment by the board of CK Asset Holdings which may cause a spark from the Trade Unions.
It will take time for the market to respond to this takeover as the negotiations move forward, but another British Asset has been taken by an Overseas Investor and adds to Li’s impressive portfolio.
In the retail sector, there have been updates to Dunelm Group Plc (LON: DNLM), Laura Ashley (LON: ALY) and Nissan (TYO: 7201).