Driven by bid activity, the M&C20 again outperformed the market this week, rising 4.2% to 1,197 points, against a 2.2% rise in the FTSE All-share to 997 points, says Will Brumby of Langton Capital.

Spirit’s shares rose another 16.6% over the week to 107p as it emerged that Magners Cider producer C&C, was considering launching a bid to rival Greene King’s.   The Spirit board took the perhaps unusual step of rejecting the 115p bid outright, however the final decision on whether or not to accept the bid lies with the shareholders rather than the board.   The shares are currently still at a discount to Greene King’s proposed price, and we’d expect, given the likelihood of one or other takeover happening, that the shares will approach at least the Greene King price.

The 3.1% rise in Greene King’s share price also adds value to their total Spirit bid package. Shareholders will receive 0.1322 Greene King shares per Spirit share they hold in addition to 8p cash.   As the value of Greene King’s shares rise so does the total value of the bid meaning Spirit shareholders would currently receive a total of around 112p per share (up from 109.5p per share at the time of the proposed bid) should Greene King’s shares remain at 787.5p. Greene King has until the 30th of October to announce whether or not it is proceeding with its bid, however this deadline may be extended.

MAB was also a large riser this week, up some 7.3%, as speculation that the company would enter a bidding war for Spirit diminished.

Fulham Shore, the David Page backed vehicle which now owns The Real Greek, began trading on AIM this week.   The company’s shares rose 25% from 6p, the price at which the majority of the new shares were placed pre its acquisition of The Real Greek, to 7.5p.  

Punch saw its shares up 17.5% over the week, rebounding from a 25% fall last week.   There were fears of a stock overhang following the refinancing last week in which some junior bondholders received equity in exchange for a partial bond write-off.  As time goes on this fear should abate, and, as the market begins to pay more attention to the fundamentals of the company, there could be more upward pressure on its share price.   Punch has its full year number on the 12th of November.

Analysis provided by Will Brumby of Langton Capital.