CK Asset Holdings, the flagship of tycoon Li Ka-shing, said it has reached an agreement to buy Greene King, which operates 2,700 pubs, restaurants and hotels in the UK, for GBP2.7 billion (US$3.27 billion).
CK Asset said in a Hong Kong stock exchange announcement late on Monday that it has bought a 2.9 per cent stake in Greene King through a wholly-owned subsidiary, and has proposed to buy out the entire issued share capital of the London-listed company for 850 pence (HK$80.8) each.
CK Asset Group already owns a small portfolio of pubs in the UK, all of which are leased to Greene King.
The cash consideration presents an enterprise value multiple of 9.5 times Greene King's earnings before interest, taxes, depreciation and amortisation, which was at GBP482 million for the 52-week period up to April 28, 2019.
"The group is a long-term and strategic investor in stable, profitable and cash flow generating businesses that benefit from real estate backing. The company believes that the UK pub and brewing sector shares these characteristics," CK Asset said.
Greene King operates under three trading divisions namely "pub company", "pub partners" and "brewing and brands" across England, Wales and Scotland. For the 13 months ended April 2019 its net profit was GBP120 million and had revenue of GBP2.22 billion.
CK Asset said it will also request approval from the London Stock Exchange and other regulators to delist the shares. The deal is subject to shareholders' approval and other conditions.
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