Hong Kong deal for Greene King chain has pub stocks bubbling

PUB stocks were given a top-up just before the bell yesterday, as acceptance of a takeover bid by Hong Kong real estate giant CKA sent its shares surging.

The FTSE 250 pub chain surged to the top of mid-cap risers in the closing minutes of trading, after announcing an 850p-per-share offer that the companies said gave it a value of £2.7bn on a fully-diluted basis and implied enterprise value of around £4.6bn.

It closed up 287p at exactly 850p, not far off the all-time high of 856.8p it reached in the final month of 2015.

The news sent other UK pub stocks surging in the final hour of trading, the growth lifting travel and leisure to be the bestperforming stock sector across Europe. Investors may have high hopes for further takeovers, especially after TDR Capital (the private equity-owned group behind Slug & Lettuce) agreed a £3bn takeover of Ei, formerly known as Enterprise Inns, the UK’S biggest pub chain.

rose by 9.6p to 115p, its biggest climb since the end of November 2017.

rose 111p Marstons

JD Wetherspoon to £15.82, while Mitchells &

Butlers rose 17.5p to 324p. Wagamama and Frankie & Benny’s-owner The Restaurant Group was also feeling the effects, gaining 7.9p to end at 145.5p. “For the battered pub trade, it’s clear the real value lies in the property,” said Neil Wilson of Markets.com, suggesting the “whopping premium” CKA was prepared to pay for Greene King showed it saw “significant value in the property portfolio”.

The late surge shook up a sleepy but sturdy market, pushing the FTSE 250 to a blue chip-beating 1.47pc rise overall, closing up 276.12 points at 19,097.97.

Four-fifths of the UK’S mid-cap shares saw their share price increase, with the main drag coming from some underperforming miners.

KAZ Minerals grabbed the unfortunate accolade of biggest faller for the second time in three days, as its exposure to a globally-weak copper market continues to sink its share price. By the end of trading it had fallen 27.3p to 407.2p.

The FTSE 100 managed to grab and hold solid gains, closing the day up 1.02pc — a 72.5 point rise to 7,189.65. Food delivery group Ocado led risers on the blue-chip index, up 53p to £12.04, after JP Morgan analysts said it was “at a tipping point in terms of profitability”.

Miner Glencore also rose, after an upbeat brokers’ note (also from JP Morgan) amid the positive influence of a global re-alignment towards risk and lowered trade-war fears that sent oil-linked firms upwards.

Only 12 blue-chips fell, with gold miner Fresnillo once again losing out from a shift to riskier assets.