Embattled pub company Eldridge Pope finally bowed to the deep pockets of entrepreneur Michael Cannon today, as a £42.3m takeover bid was laid on the table.
The bid, which has been recommended by Eldridge Pope’s directors, still has to get the nod from shareholders but, as Cannon now has backing form shareholders representing 40% of the company, that should be a formality.
The cash offer of 171p a share represents a premium of 15.8% on the 147.7p closing price of Eldridge at the time of its interims and up to 8 September, when it said it was in discussions with Cannon over a possible offer.
Chief executive Susan Barratt said Cannon had made it clear he was now prepared to inject substantial capital into the business.
She said the market as a whole, particularly the high-street, was tough, especially when compared with last year’s hot summer.
“It is a mixture at the moment. The high-street is pretty tough and some of the destination food outlets have suffered because of the lack of sunshine this summer,” she added.
Cannon himself said the offer represented an “excellent opportunity” for shareholders.
Cannon first fuelled speculation about his intentions in May when he bought 1.5 million shares in the company.
He failed in a bid to take control of Eldridge Pope in August last year, at the time garnering only 2% of shareholder support for a 165p-per-share offer.
But this time, with the company struggling of late, it looks like he has finally won shareholders around.
by Nic Paton
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