Stonegate, the owner of British pub chain Slug and Lettuce, announced on Thursday, July 18, that it has agreed to Ei Group, a larger rival, and gain around 4,000 additional pubs, Reuters reported.
The offer of £1.27 billion (US$1.58 billion) represented a 38% premium to Ei’s closing price on Wednesday, and its shares surged almost 40% in morning trade.
Ei CEO Simon Townsend told Reuters that Stonegate had made an initial unsolicited approach to Ei’s board a few months ago, which was rejected as insufficient and subsequent revisions were also turned down.
“There came a point where we were able to achieve a price which the board felt was worthy of engagement and has led us to the place where we are today,” Townsend said.
Currently, Stonegate operates 765 pubs in the UK and will assume debt of £1.7 billion (US$2.1 billion) as part of the deal.
Full Content: Reuters