The M&C20 rose 2% this week to 1,221 points, ever so slightly underperforming the 2.1% rise in the wider market which saw the FTSE All-Share end at 1,018 points, says Will Brumby of Langton Capital.

Marston’s and Mitchells & Butler were modest risers this week, up 3.4% and 2.3% respectively,  following news last Thursday that C&C have engaged Spirit about a possible bid. This seems to have been interpreted by the market as a sign that neither of the two pubcos will enter a bidding war for Spirit.

Spirit was down 2% as uncertainty over the possibility of a C&C bid, following the Magner’s Cider producer delivering poor half year numbers, somewhat lessened expectations of a bidding war.  However one might argue that these numbers came out a mere five days after the company confirmed it had approached Spirit, and must therefore have been known to management before they made their decision.

Greene King saw its shares up 1.8% over the week to over 801p, bringing the total value of the company’s proposed bid for Spirit to 114.5p.   The company has had the ‘put up or shut up’ for its Spirit bid extended to next Tuesday. 

Punch saw its shares go 7.2% better this week, however they are still at a discount to their value pre the 20 for 1 consolidation earlier this month.  Fears of a stock overhang should be diminishing as most bondholders who received equity in exchange for a junior bond write-off have not taken this opportunity to sell, and city analysts will have a chance to re-evaluate the newly refinanced company.  The company releases its preliminary full year results on 12 November.

Dominos was 4.3% better this week as the shares continued their rally post strong numbers in the company’s IMS on the 2nd of October.   The shares are up some 10% since the beginning of the month.

Enterprise Inns was another strong riser, seeing its shares up 6.3% this week.   The company will undoubtedly be benefitting from the unseasonably warm weather this winter, and we have heard from competitors recently that tenanted operations are improving.

SSP Group’s shares were up 3.8% as fears over the Ebola virus slip from the headlines. The shares are still around 5% below the levels they were at before the virus began being transmitted outside of West Africa.

Prezzo saw its shares fall 2.8% to 128.5p.   TPG Capital and Advent International, the private equity firms that approached the company with a bid offer, received an extension of their deadline yesterday, however it has been repeatedly asserted that the bid is unlikely to be over 135p per share. 

Next week will see J.D. Wetherspoon update on its Q1 trading on Wednesday.   The shares were up 2.2% this week perhaps in anticipation of good numbers given the favourable weather conditions.

Analysis provided by Will Brumby of Langton Capital