Greene King bought the East Midlands brewer Hardys & Hansons for £271m yesterday, ending 174 years of independence and handing the two founding families with an £80m windfall to share.
Greene King beat off tough competition from pub rivals including Wolverhampton & Dudley and agreed a deal, to be funded by debt, with Hardys yesterday. It will pay £10.59 in cash for each ordinary share and £11.65 for each deferred share.
The acquisition adds 268 community pubs in the East Midlands to Greene King's 2,400 outlets in its heartland in south-east England.
Rooney Anand, Greene King's chief executive, said there was a perfect fit between the two businesses and noted that Hardys' high-quality, predominantly freehold and food-led pubs are located in rural and edge-of-town areas such as the Greene King estates, rather than on the ultra-competitive high street.
Hardys counts the Ye Olde Trip to Jerusalem in Nottingham among its pubs, reputedly the country's oldest tavern.
The Campaign for Real Ale consumer group called on Hardys shareholders to reject the takeover. Its chief executive, Mike Brenner, said: "If this deal goes through, history has shown us that Hardys & Hansons brewery and beers will not be in safe hands." Greene King claimed it had 82.3 per cent acceptances from Hardys shareholders, including the directors.
The two families, who founded Hardys & Hansons in 1832 and 1847 respectively and merged them in 1930, control at least half the total votes through holding 5 million deferred shares in the business. Some family members also hold ordinary shares which add up to a further 10 per cent stake in the business. The deferred shares are worth £58.25m under the terms of the deal while the other holdings are valued at £21.2m, netting the two families £79.4m between them.
Hardy's managing director, Jonathan Webster, and the finance director, David Smith, whose future roles are uncertain, are in line for an undisclosed bonus, while other senior management will also share in a transaction bonus.
Although Greene King said it would continue to brew Hardys' key beer brandsand may start to offer them in Greene King pubs, the future of the Kimberley brewery in Nottingham is uncertain.
The group hopes to reap cost savings of £3m in the first full year after the Hardys purchase, which will then rise to £5m.