By Rahul B and Philip Blenkinsop
(Reuters) - Heineken NV (AS:HEIN) and investment partner Patron Capital have struck a 403 million pounds deal to buy and break up Punch Taverns (L:PUB), in a move that will make the Dutch brewer Britain's third-biggest pubs group.
The companies said on Thursday Punch shareholders would receive 180 pence per share in cash, a premium of more than 40 percent to Punch's closing price on Tuesday, a day before a potential deal was first reported.
However, Punch shares leapt to a 2-year high of 198.75 pence, suggesting investors are hopeful of a higher offer.
Punch said on Wednesday it had received two takeover approaches, a possible 174 pence per share offer from Heineken and its partner, and a higher 185 pence per share proposal from Emerald Investment Partners, founded by Alan McIntosh, the pub group's former finance director. It was not immediately clear how Emerald would respond. It declined to comment.
Punch said on Thursday that Emerald's proposal was conditional on financing, ongoing due diligence and there could be no certainty of a firm offer.
Heineken, which makes Amstel, Sol, and tequila-flavoured Desperados alongside Strongbow cider and its green-bottled Heineken lager, will pay 305 million pounds to buy the majority of Punch's pubs, nearly tripling its existing UK estate.
The Dutch firm is unusual among major brewers in owning pubs, but believes they ensure direct contact with consumers, help the testing of new products and offer better margins in the UK than selling beer or cider.
Punch said the deal with Heineken and Patron had the support of its top three investors representing about 52.3 percent of its existing share capital, but that their commitment would lapse if there was a rival offer of 200 pence a share or more.
Heineken and Patron referred to their offer as final, but said it could be increased in the event of a competing bid.
Punch is currently Britain's second-biggest pubs group, but its estate will be split with Heineken taking 1,900 pubs and real estate investor Patron more than 1,300 sites.
Heineken currently has 1,049 pubs, mostly bought from Royal Bank of Scotland (LON:RBS) in 2011.
The Dutch firm said it would refurbish the acquired pubs and ensure they could sell food. It expects to benefit from economies of scale and increased sales of its beer and cider.
Heineken has made efforts to increase its emerging market presence in recent years with purchases in Mexico and Asia, but remains Europe's leading brewer.
Punch is being advised by Goldman Sachs (N:GS), while Heineken is being advised by Nomura and DLA Piper.