Derek Pain: Cheers to a quick-fire profit with the Capital Pub Company
No Pain, No Gain
Saturday 30 July 2011
It is always a pleasure to book a profit, particularly a handsome, quick-fire one. In six months the no pain, no gain portfolio has almost doubled its money on its investment in the Capital Pub Company. Although the cash has still to arrive, bidder Greene King has stormed in to grab control, even before posting its offer, which means the rewards are as good as in the bag. In effect it is a done deal.
Some shareholders have sold in the stock market, reasoning, no doubt, that they may as well get their hands on the money as quickly as possible rather than wait for the protracted takeover process to be completed. They have sacrificed a few coppers per share. The portfolio intends to sit tight until it gets Greene King's cheque. Indeed, it is in no rush to unload.
Such a laid-back approach reflects the simple fact that I do not have a replacement immediately to hand. A number of shares are on my shortlist but I have yet to make a final decision. Compounding my lack of urgency is that I am a rather superstitious old feller and I don't like to tempt fate by reducing the number of constituents to "unlucky 13". I realise in this high-tech age such an attitude is rather stupid but I cannot avoid the thought that us investors have enough uncertainties to contend with and it is best to take every precaution possible.
The portfolio arrived at Capital early this year, paying 120p a share. The Greene King offer is 235p, capitalising the company, started 11 years ago as a business expansion scheme venture, at £70m. My decision to descend on Capital, which has 35 outlets, stemmed not from takeover hopes, although it was obvious such a possibility existed, but from indications it was a well-run company exploiting, as a niche player, the London pubs scene. Although the pub industry is suffering acute embarrassment on a national level, more upmarket establishments in and around London are enjoying excellent trade.
Not surprising then that Fuller, Smith & Turner, London's last remaining old-style brewer, saw the attractions of Capital's chain. But Fuller was outgunned by Greene King which had earlier splashed out £53.3m for the 14-strong outlets of an unquoted concern called Realpubs.
Whether Greene King's 235p shot is a full price is debatable. Capital possibly represents the last quality chance for any bidder to increase its London presence. Fuller's 200p indicative offer never stood a chance but there was stock market talk that at least 250p, possibly more, would have been more appropriate. Still Capital's board accepted Greene King's overtures and, perhaps rather sadly, an interesting little venture is being swallowed and will disappear.
I had wondered whether Marston's, Greene King's rival, would chase the Capital prize. But that portfolio member is quite heavily borrowed and has an extensive programme of building new pubs to occupy its attention. In the past few weeks a number of stockbrokers have chorused their praise for the Brakspear and Pedigree brewing and pubs group. One of them, Credit Suisse, has given the shares an "outperform" rating with a 131p target price. Numis is also keen and advocates a 130p target.
Another constituent making corporate news is Patsystems, providing such esoteric facilities as computerised derivative trading platforms. It is acquiring a US group with equities and options trading software, called Mixit, for cash and shares. Cost is a maximum of £17.6m with a £12.6m down payment. An Irish group, ION Trading, will, no doubt, scrutinise this takeover. It has a stake of more than 29 per cent, which will be diluted by the deal. Still this transatlantic expansion looks a shrewd excursion, which will increase the group's range and provide opportunities for cross selling.
Another constituent, Hargreaves Services, the coal to transport group, has at last won local authority approval for its Tower coal development in Wales. Permission is subject to certain, as yet unexplained, conditions. However, Hargreaves says once the final hurdles are cleared it will not take too long to get the project up and running. Negotiations have certainly been protracted but Hargreaves believes its Welsh development will provide some seven millions tonnes of coal over six years.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 2 Saudis risk new Muslim division with proposal to move Mohamed’s tomb
- 3 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 4 Cee Lo Green: It is only rape if the victim is conscious
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Ashya King: Parents of five-year-old boy refused permission to visit him in hospital and denied bail at Spanish court
With Douglas Carswell joining Ukip, my party has taken another giant step forward
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
Ashya King: 'Cruel NHS has not given us the treatment we need', says father of five-year-old with brain tumour who fled to Spain
iJobs Money & Business
£30000 - £45000 per annum + benefits+bonus+package: Harrington Starr: Front-Of...
£700 per day: Harrington Starr: Quantitative Developer C++, Python, STL, R, PD...
£700 per day: Harrington Starr: Java/Calypso Developer Java, Calypso, J2EE, J...
£500 per day: Harrington Starr: SQL Developer SQL, C#, Stored Procedures, MDX...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony