Marstson's board rejects US private equity takeover offer

LaToya Harding
·Contributor
·2 min read
The London-listed company said the offer of 105p per share 'very significantly undervalues' the group. Photo: Nathan Stirk/Getty Images
The London-listed company said the offer of 105p per share 'very significantly undervalues' the group. Photo: Nathan Stirk/Getty Images

Pub chain Marston’s (MARS.L) has rejected a takeover offer from US private equity group Platinum Equity Advisors.

The London-listed company said the offer of 105p per share “very significantly undervalues” the group. The proposal represents a 19% discount to the company's share price at the start of 2020, before the start of the COVID-19 pandemic.

Marston’s added that “since that time the company has completed the transformative joint venture with Carlsberg to create the Carlsberg Marston's Brewing Company, which realised significant value on completion and is anticipated to continue to do so as the benefits of the joint venture are realised.”

The offer also followed two earlier proposals at 88p and 95p per share in December 2020, both of which were unanimously rejected by the board, and a deal made in December to operate 156 high quality pubs within the SA Brain estate in South and West Wales.

The brewing giant shares closed 6% up on Monday at around 87p, a decline from the 129p it was trading at before the health crisis.

READ MORE: Pubs hit by lockdown tiers get £1,000 from UK government but industry says it’s not enough

As the UK remains in its third national lockdown, Marston's 1,300 pubs across the country are closed to prevent the spread of COVID-19 and its more transmissible variant. In October, Marston's announced that it would axe up to 2,150 furloughed jobs because of the rolling lockdowns.

Earlier this month, the brewer reported revenues of just £54m ($74m) for the three months to December, which accounts for the vital Christmas trading period. It was a huge fall from the £1.2bn it earned in the same period a year earlier.

The hospitality and leisure sectors have been significantly hit by ongoing lockdowns across the country in the last year, as well as curfews.

Pubs have also had to adapt to rules regarding serving food and social distancing or face crippling fines, as restrictions over the summer stipulated people could only meet in groups if they sat outside.

Platinum is required to either announce a firm intention to make an offer for the company by 5pm on Friday 26 February, or walk away. The deadline can be extended with the consent of the takeover panel.

WATCH: How many pubs, restaurants and clubs closed their doors permanently in 2020