Derek Pain: Cheers to a quick-fire profit with the Capital Pub Company

No Pain, No Gain

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; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Digital Optimisation Executive - Marketing

    £30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

    Recruitment Genius: Financial Reporting Manager

    £70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

    Recruitment Genius: Payments Operations Assistant

    £23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

    Recruitment Genius: Telephone Debt Negotiator

    £13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

    Day In a Page

    Sepp Blatter resignation: The beginning of Fifa's long road to reform?

    Does Blatter's departure mean Fifa will automatically clean up its act?

    Don't bet on it, says Tom Peck
    Charles Kennedy: The baby of the House who grew into a Lib Dem giant

    The baby of the House who grew into a Lib Dem giant

    Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
    Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

    The harrowing testament of a five-year-old victim of Syria's endless civil war

    Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
    The future of songwriting: How streaming is changing everything we know about making music

    The future of songwriting

    How streaming is changing everything we know about making music
    William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

    Recognition at long last

    Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
    Beating obesity: The new pacemaker which helps over-eaters

    Beating obesity

    The new pacemaker which helps over-eaters
    9 best women's festival waterproofs

    Ready for rain: 9 best women's festival waterproofs

    These are the macs to keep your denim dry and your hair frizz-free(ish)
    Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

    Wiggins worried

    Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
    Liverpool close in on Milner signing

    Liverpool close in on Milner signing

    Reds baulk at Christian Benteke £32.5m release clause
    On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

    On your feet!

    Spending half the day standing 'reduces risk of heart attacks and cancer'
    With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

    The big NHS question

    Why are there so few new GPs when so many want to study medicine?
    Big knickers are back: Thongs ain't what they used to be

    Thongs ain't what they used to be

    Big knickers are back
    Thurston Moore interview

    Thurston Moore interview

    On living in London, Sonic Youth and musical memoirs
    In full bloom

    In full bloom

    Floral print womenswear
    From leading man to Elephant Man, Bradley Cooper is terrific

    From leading man to Elephant Man

    Bradley Cooper is terrific