Mark Brumby at Langton Capital looks at the current state of play in the approaches for Spirit and the extension of the put-up-or-shut-up deadline to 5pm 4 November.

What’s happened?

·         Takeover Panel extends deadline for GNK to put up or shut up to 5pm next Tuesday

·         SPRT ‘remains in discussions with Greene King regarding the terms of the Possible Offer.’

·         SPRT reiterates ‘the Board remains willing to recommend an offer [currently 112.7p]’

·         Says ‘this remains subject to the satisfactory resolution of the other terms’

What does it mean?

·         An extension was more likely than not, the time slippage is minimal

·         GNK is still in pole position, C&C does not have to act till 30 Nov

·         APRT shares are beginning to exclude chance of a rival offer

·         SPRT (at 104p) is a 7.7% discount to the current indicative offer

·         Any increase in GNK’s share price or a rival offer would push this number up

Implications, conclusion etc.:

·         SPRT shareholders are sitting pretty

·         A GNK bid is more likely than not, if it doesn’t materialise, C&C may be there at 115p

·         Ex a bid, SPRT could fall c15-20p – but this is the least likely outcome

·         We would reiterate:

 1) SPRT is likely to lose its independence

2) this will happen soon

3) it will take place at a premium to 104p.