S&N soars on pub buy

SHARES IN Scottish & Newcastle, the Edinburgh-based brewer, soared yesterday as the City endorsed its pounds 1.135bn bid for Greenalls' pubs and restaurants division, writes Lucy Baker.

Analysts said the deal, which will force S&N to sell off 600 of its smaller outlets and will strip Greenalls of about 60 per cent of its assets, is earnings enhancing and will boost the Scottish firm's position in the profitable budget hotels market. S&N was the second best performing FTSE stock yesterday and closed up 19p at 612p.

If the deal goes ahead, Greenalls will be left with a streamlined group, said to be worth pounds 600m. The company said yesterday it would return pounds 430m to shareholders if the sale goes ahead and use the balance to clear its debts. The acquisition is subject to regulatory and shareholder approval. Greenalls shares closed down 7p at 361p.

Outlook, above