Greene King is to acquire Capital Pub Company for £70m, approximately £16m more than the sum proposed by rival Fuller's as part of its bid for the 34-strong London-based pub operator. Greene King's offer values Capital shares at 235p. Capital last month rejected Fuller's indicative offer proposal of 200p, which valued the company at close to £54m, unanimously and restated its ambition to operate an estate of 45/50 pubs in London by the middle of 2013. The offer price represents a 51% premium on Capital's closing price of 155.5p per share on 16 June, the day before Fuller's announced its approach for Capital. Earlier this month, Fuller's was given a "put up or shut up" deadline of 1 August by the City's Takeover Panel to table a formal bid for Capital. Greene King's offer is also a 70% premium to the average closing price of 138p for the proceeding six months. Shares in Capital closed yesterday up 3.44% (7p) to 210.5p, which gave the company a market capitalisation of £56.768m. The deal, which is subject to shareholder approval, implies an enterprise value of £93 million for Capital. Capital's board has unanimously recommended the offer. It becomes Greene King's latest large scale pub acquisition this year after the company bought Realpubs for £53.1m in April, and is a major step in its aim to increase its presence in London. The acquisition takes Greene King's managed Retail estate to 950 - the company has a target of 1,100 sites for the division. Greene King said it is not anticipated that the full Capital management team will remain in place although discussions have yet to take place. Greene King said: "The directors of Greene King believe that the acquisition of Capital Pubs not only represents an opportunity to maintain and develop the existing strengths of Capital Pubs as part of Greene King, but also an opportunity to create an even stronger pub retailer within the attractive and growing premium eating and drinking out market in London. "The combined business will operate approximately 250 pubs within Greater London and Greene King sees significant benefits from operating Capital Pubs alongside its recent acquisition, Realpubs, and its existing premium London pubs. There are also specific opportunities to grow food and accommodation participation within Capital Pubs. "The acquisition of Capital Pubs is expected to be earnings enhancing to Greene King in the first full year of trading and will generate returns above Greene King's cost of capital in year one." Greene King chief executive Rooney Anand said: "The proposed acquisition represents another firm step as we continue to expand our presence in London. Capital Pubs would bring a further 34 premium pub assets and take our Greater London estate to approximately 250 at a time when London is outperforming the national pub market. "This offer represents a fair price for a high quality, largely freehold pub estate. Capital Pubs is a premium London pub company that fully meets our criteria as we continue to progress our retail expansion strategy. "Capital Pubs' estate fits well within the Greene King portfolio and we intend to combine it with our recently acquired Realpubs business, thereby generating attractive cost and revenue synergies". Clive Watson, chief executive Capital Pub Company, said: "Greene King is an excellent cultural fit with Capital Pubs and will be a good home both for the business and for our staff. "Greene King is renowned for nurturing the businesses it acquires and I have every confidence that Capital Pubs will continue to develop under its ownership. We have recommended Greene King's deal to shareholders as we believe it reflects both our high quality business and its prospects". For the 52 weeks to 26 March 2011, Capital recorded revenue of £27.2m and ebitda of £8.95m for 31 sites. Greene King said this does not reflect the full composition of the estate as just 22 pubs were open for the full 52 weeks - these 22 sites had a house ebitda of £7.2m in the period. Capital also expects to achieve average weekly revenue of about £20,000 each on the 12 pubs that have recently been refurbished or acquired by the end of the current financial year. Under the terms of the offer, Capital shareholders will be entitled to receive 235p per Capital share in cash. The offer price is inclusive of the final dividend of 2.25p proposed by the Capital's board on 21 June, and as a result, the final dividend will no longer be proposed and the AGM; this has been deferred from its original date of 17 August. Meanwhile, Capital has completed the acquisition of the Priory in London’s Clerkenwell, from Large Bars, the gastropub operator. Capital exchanged contracts on the Priory last month and has now acquired the leasehold interest of the the free-of-tie site for £160,000. Property adviser Shelley Sandzer acted on behalf of Large Bars.