Leading analyst Nick Batram at Peel Hunt says that his interpretation of events surrounding the approaches for Spirit Pub Company is that Greene King’s offer is reasonable but clearly no knock-out.

He said: “For Spirit shareholders the the odds (which already looked pretty long) of no successful bid at the end of this process have lengthened, therefore the right strategy looks to sit tight and let the situation play out.

“The leftfield approach from C&C has been quickly dismissed by the Board of Spirit. Press speculation has been around a 115p offer of which around a third would be cash. Whilst this suggests a higher cash component, overall an offer at this level is not materially above the current value (113p) of the Greene King approach. The synergies also look clearer and easier to deliver and therefore we can see why the Spirit Board has rejected the approach.

“C&C’s bid logic is very different from that of Greene King and with a market cap of c£1.1bn, Spirit would be a transforming deal for the drinks group in terms of financial as well as operational. It is no doubt an ambitious approach and strategy for C&C and it could be this that drives them to raise their bid. It is difficult to quantify at this stage the scale of upside that Spirit can deliver to C&C.”