C&C shares plunge as cider maker takes aim at UK pub group Spirit

An employee lays a dining table inside The Yew Tree pub, operated by Chef and Brewer

John Mulligan

Bulmers' maker C&C has gate-crashed a planned buyout of UK pub group Spirit and is expected to table a rival €1bn bid for the business, which has more than 1,200 outlets.

If it succeeded, it would be a major transformational shift for the Irish company, whose brands also include Tennent's and Blackthorn cider.

Spirit Pub Company has been pursued since September by UK brewer and pub owner Greene King.

Last week, Greene King submitted a revised proposal to buy Spirit, valuing it at about £723m (€918m).

Spirit had rejected an earlier proposal from Greene King that valued it at £661m.

Spirit confirmed on Thursday night that it had received a preliminary approach from C&C, which is headed by chief executive Stephen Glancey, but had reviewed it and rejected it.

C&C, which is being advised by Rothschild, has until November 20 to say whether or not it will make an offer to buy Spirit.

C&C said there's no certainty that a firm offer will be made, but added that buying Spirit, "one of the highest quality pub estates in the UK", would "transform C&C and enhance long-term shareholder value".

Shares in C&C plunged yesterday on news that it's considering making an offer to buy Spirit, and they closed down over 10pc.

The Irish group, which recently bedded down its €58m acquisition of drinks distributor Gleeson, said that there would be revenue and cost synergy benefits from acquiring Spirit and give the enlarged business a "broader range of strategic and operating options".

"C&C's management team is experienced in running a vertically integrated pub and long alcohol drinks business and strongly believe that a combination of C&C's brands with Spirit's high quality, well-located pub estate is the most effective way to optimise shareholder returns in a competitive UK market," it said.

The Spirit pub chain was spun out of Punch Taverns in 2011.

Its outlets are run under names such as Fayre & Square, Flaming Grill, and Chef & Brewer. About 450 of its pubs are leased and 750 are branded.

Greene King lost out in May in a bid to buy most of the pubs owned by rival Orchid Group.

They were eventually sold to UK group Mitchells & Butlers for £266m (€338m).

Irish horse racing tycoons John Magnier and JP McManus own over 20pc of Mitchells & Butlers between them.