City Pub Group’s shares have surged by 37% after the company announced its agreement to a £162 million ($201.2 million) takeover by Young & Co.’s Brewery. However, it is expected that there will be job cuts following the completion of the deal.
At 13:52 GMT, the shares were up 36.50 pence, reaching 135.50 pence, whereas Young shares declined by 10.0 pence or 0.9% to 1,100.0 pence.
Young stated on Thursday that it plans to identify areas of overlap between the two companies, which may result in the elimination of some management, corporate, and support function positions. On the other hand, no jobs are expected to be affected in the pub and bedroom teams.
The company emphasized that no final decisions have been made regarding the extent or composition of the job losses at this stage.
“While the City Pubs board regrets any potential job cuts, it recognizes the potential benefits to City Pubs as it joins the combined group in its next growth phase. It anticipates that current City Pubs employees will have opportunities for advancement within the combined group,” stated the company.
Acquisition Deal Sends City Pub Shareholders Soaring
City Pub Group, the British pub operator, has agreed to be acquired by Young & Co.’s Brewery in a deal that values each City Pub share at 145 pence. The acceptance of the deal will result in shareholders receiving 108.75 pence in cash and 0.032658 of a Young’s A share. This represents a premium of 46% compared to the stock’s closing price of 99 pence on Wednesday.
Once the transaction is complete, City Pub shareholders will hold a 6% stake in the combined group, while Young shareholders will own the majority. The merged entity is projected to be valued at approximately GBP673 million, based on Wednesday’s closing share prices.
Clive Watson, Chairman of City Pub, expressed his confidence in the deal, stating that it “significantly accelerates the value” that could be achieved in the short term by City Pubs if it were to remain independent. He also highlighted the alignment of entrepreneurial culture and investment approach between the two companies.
Young’s Chief Executive, Simon Dodd, praised City Pubs as an exceptional business that closely aligns with Young’s in terms of strategy and culture. Despite the challenging trading environment, both companies have demonstrated resilience and success, underscoring the strength of their business models, people, and customer-centric approach.
The acquisition deal between City Pub Group and Young & Co.’s Brewery signifies a compelling opportunity for growth and collaboration in the pub industry.
Leave a Reply