Greene King toasts £5bn Hong Kong bid

CK Hutchison, the owner of Three and Superdrug, in swoop for Britain’s biggest brewer and pub group

HONG KONG’S richest man has made a bid to become one of the biggest players in the British beer business, with a £4.6bn takeover of Greene King, the FTSE 250 brewer and owner of 3,000 pubs.

CK Hutchison, the conglomerate controlled by 91-year-old billionaire Li Ka-shing, sprung a surprise yesterday afternoon with an 850p-a-share deal that valued shares in the 220-year-old brewer and pub company at a premium of more than 50pc.

The deal further expands Mr Li’s involvement in the British consumer economy and property. CK Hutchison already owns Superdrug and the mobile network Three, among other UK assets.

The bid won the support of Greene King’s board, who in May bid farewell to the company’s longstanding boss Rooney Anand.

It comes just weeks after private equity firm TDR Capital struck a £3bn deal for portfolio company Stonegate to buy Ei, Britain’s biggest pub group, and forms part of a wave of buyouts this summer. Merlin Entertainments, BCA Marketplace and Inmarsat have all been targeted for delisting.

CK Hutchison’s planned takeover of Greene King immediately raised fresh concerns over the future of pubs, despite reassurances that the owners believe “pubs will continue to be an important part of British culture”.

The Campaign for Real Ale (Camra) has warned that about two pubs per day are being closed, with many redeveloped as housing. Last year Fuller’s, one of London’s oldest breweries, was bought by Japanese firm Asahi.

Nik Antona, Camra’s chairman said: “The news that Britain’s largest pub and brewery company has been sold to an international asset company is very concerning for our beer scene. We will be calling on the new owners to retain the current portfolio to safeguard thousands of pubs and jobs across the country.” Representatives of both Greene Li Ka-shing’s 850p-a-share offer valued shares in the 220-year-old brewer at a premium of more than 50pc King and CK Noble insisted that there would be no change in strategy.

Chief executive Nick Mackenzie will remain in his post, although chairman Philip Yea will step down if the deal is given the green light by investors. CK Hutchison said that it “does not intend to make material changes with regard to the continued employment of the employees and management”.

Mr Mackenzie said that CK “shares many of Greene King’s business philosophies”.

CK Hutchison is one of the biggest overseas investors in Britain, also owning rolling stock and the Port of Felixstowe as part of a sprawling global business that last year reported revenues of £48bn. The empire, listed on the Hong Kong stock exchange, was founded by Mr Li as a plastics maker in 1950. It is now led by his son Victor, 55, while Mr Li remains a revered figure in Hong Kong. Last week he made an ambiguous contribution to the political turmoil gripping the territory with an advertising campaign that warned “the best intention can result in the worst outcome”.

George Magnus, chairman of CK Noble, the CK Hutchison subsidiary behind the bid for Greene King, said its strategy was to “look for businesses with stable and resilient characteristics and strong cash flow generating capabilities”. “The UK pub and brewing sector shares these characteristics and we believe that this sector will continue to be an important part of British culture and the eating and drinking out market in the long run,” he said.