Platinum Equity, a US-based private equity firm, has confirmed that it will no longer move forward with a proposed takeover of Marston’s, after the pub group “unanimously rejected” its proposal earlier this month.
Last month, Marston’s confirmed that Platinum put forward an unsolicited, non-binding proposal of a possible cash bid to the group.
At the time, Marston’s board said it was evaluating the proposal with its advisors, but noted there was “no certainty” that a firm offer would be made.
However, on 1 February Maston’s said it had considered the proposal, which was of 105 pence per Marston’s share, and “unanimously rejected” it on the basis that it “very significantly undervalues” the group.
It said the proposal represented a 19% discount to the group’s share price at the start of 2020, pre-Covid 19, and that since that time, it has completed a 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”.
In addition, Marston’s had previously announced in December an agreement to operate 156 high quality pubs within the SA Brain estate in South and West Wales, in a transaction which is “expected to be accretive to earnings” in the first full year of trading.
Platinum’s proposal followed two earlier proposals at 88 pence and 95 pence per share in December 2020, both of which were issued before the Brain’s takeover and unanimously rejected by the board.
In a newly-released statement, Platinum said: “Platinum notes Marston’s statement addressing press speculation on 29 January 2021 regarding a possible cash offer for the entire issued, and to be issued, share capital of Marston’s and Marston’s subsequent rejection of the Proposal on 1 February 2021.
“Platinum today announces that, after careful consideration, it does not intend to submit a revised proposal and it will not make a firm offer for Marston’s.”
A statement from Marston’s accepted Platinum’s announcement, and said: “The board continues to believe that Marston’s is well placed to benefit from the opportunities in a post-Covid 19 trading environment, following the completion of the SA Brain transaction and harnessing factors such as a reduction in on-trade industry supply, and increased home-working that will benefit pubs in suburban locations.
“Marston’s has a strengthened balance sheet following the creation of the synergistic joint venture with Carlsberg and significant cash headroom, enabling it to continue to absorb the impact of the temporary Government restrictions. We welcome the continued nationwide rollout of the vaccine programme and look forward to rebuilding trading momentum once restrictions are lifted.”