UK: Marston's confident ahead of shareholder cash call
Marston's has said it remains confident of securing shareholder backing for its GBP176m share rights issue, despite reports of criticism from some investors.
The "huge bulk" of the brewer and pub group's share register has backed the plan, a source familiar with the situation told just-drinks today (30 June).
The comments contrast with reports that some investors and analysts have criticised the move as too costly.
Marston's said earlier this month that it planned to issue nearly 300m new shares at a discounted price of GBP0.59 per share. Of the GBP176m (US$288m) to be raised, GBP140m is to be spent on building new pubs.
A source close to the company said today that there is "absolutely not" a chance that the rights issue would be derailed when put to a shareholder vote on 6 July.
Marston's CEO Ralph Findlay said when announcing the fundraising plan: "The roll-out of new build pubs can generate higher returns at lower risk than acquiring mixed packages of existing pubs and is important to our long-term strategy to drive shareholder value."
Most of the new pubs are expected to be large, food-based establishments located on the outskirts of towns.
Following the rights issue announcement, analyst group KBC Peel Hunt said in a note: "The company has good experience in large destination food outlets, which are the strongest growing part of the sector, and has built 30 in the last two years.
"Traditionally Mitchells & Butlers' core space, a gap has now opened in this market as Mitchells has had to suspend expansion."
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