The Board confirms that it has received a proposal from Patron Capital Advisers LLP (“Patron”) regarding a possible cash offer for Punch at 174 pence per Punch share (the “Patron Proposal”). As part of the Patron Proposal, Heineken N.V. (“Heineken”) would acquire Punch A (one of two securitisation structures within the Punch group) from Patron immediately following completion of Patron’s offer for Punch. The Patron Proposal is conditional on, amongst other things, the recommendation of the Board. The Board is in advanced discussions with Patron and Heineken regarding the Patron Proposal.
The Board also confirms that it has also received an approach from Emerald Investment Partners Limited (“Emerald”) regarding a possible cash offer for Punch at 185 pence per Punch share (the “Emerald Proposal”). The Emerald Proposal is conditional on, amongst other things, arranging committed financing, confirmatory due diligence, and the recommendation of the Board. The Board is in discussions with Emerald regarding the Emerald Proposal.
Ever since this announcement from on 14 December 2016 that the board have been approached by two separate parties with cash offers to purchase Punch Taverns (LSE: PUB) stock the share price has hovered around the 170-190p mark and has stayed there ever since.
I do not want to take any chances that all cash offers will be withdrawn a deal falling through so I’m getting out now.
Besides it’s been a nice run with Punch Taverns (LSE: PUB) – a stock that has not really given Shares and Stock Markets HQ any reason to not sleep at night.
More than that though Punch Taverns (LSE: PUB) is a classic value investing play: buying stock in an essentially sound business when the market has overreacted to the announcement of bad news.