NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

19 August 2019

RECOMMENDED CASH ACQUISITION

of

GREENE KING PLC

by

CK NOBLE (UK) LIMITED

(a wholly-owned subsidiary of CK Asset Holdings Limited)

to be effected by means of a Scheme of Arrangement

under Part 26 of the Companies Act 2006

Summary

·          The boards of CK Noble (UK) Limited ("CK Bidco") and Greene King plc ("Greene King") are pleased to announce that they have reached agreement on the terms of a recommended cash offer by CK Bidco for the entire issued and to be issued share capital of Greene King, not already owned by or on behalf of the CKA Group. It is intended that the Acquisition will be implemented by way of a scheme of arrangement.

Acquisition terms

·          Under the terms of the Acquisition, each Greene King Shareholder will be entitled to receive:

·          In addition, the Acquisition allows for the distribution of the previously announced final dividend for the 52 weeks ended 28 April 2019 of 24.4 pence per Greene King Share to be paid (subject to approval by Greene King Shareholders at Greene King's upcoming annual general meeting) on 13 September 2019 to Greene King Shareholders on the register as at the close of business on 9 August 2019 (the "Final Dividend").

·          The Cash Consideration under the terms of the Acquisition values the entire issued and to be issued share capital of Greene King at approximately £2.7 billion on a fully diluted basis and implies an enterprise value of approximately £4.6 billion. The Cash Consideration represents:

·          a premium of approximately 51.0 per cent. to the Closing Price of 563 pence per Greene King Share on 16 August 2019 (being the last Business Day prior to the date of this announcement);

·          a premium of approximately 42.8 per cent. to the adjusted three month volume weighted average price of 595 pence per Greene King Share to 16 August 2019 (being the last Business Day prior to the date of this announcement);

·          a premium of approximately 39.6 per cent. to the adjusted six month volume weighted average price of 609 pence per Greene King Share to 16 August 2019 (being the last Business Day prior to the date of this announcement); and

·          an enterprise value multiple of approximately 9.5x Greene King's EBITDA of £482 million for the 52 week period to 28 April 2019, or 10.0x including the fair value of interest rate swap liabilities as at 28 April 2019.

·          If, on or after the date of this announcement and before the Effective Date, any dividend and/or other distribution and/or return of capital (other than the Final Dividend) is declared, made or paid or becomes payable in respect of the Greene King Shares, CK Bidco reserves the right to reduce the Cash Consideration payable under the terms of the Acquisition for the Greene King Shares by an amount up to the amount of such dividend and/or other distribution and/or return of capital, in which case any reference in this announcement to the Cash Consideration payable under the terms of the Acquisition will be deemed to be a reference to the Cash Consideration as so reduced. In such circumstances, Greene King Shareholders would be entitled to retain any such dividend and/or other distribution and/or return of capital.

·          The Cash Consideration payable by CK Bidco to Greene King Shareholders under the terms of the Acquisition will be funded from the existing cash resources of the CKA Group.

Recommendation

·          The Greene King Directors, who have been so advised by Citigroup and Rothschild & Co as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing their advice to the Greene King Directors, Citigroup and Rothschild & Co have taken into account the commercial assessments of the Greene King Directors.

·          Accordingly, the Greene King Directors intend unanimously to recommend that Greene King Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions relating to the Acquisition at the Greene King General Meeting as the Greene King Directors who hold Greene King Shares have irrevocably undertaken to do in respect of their own beneficial holdings totalling 155,026 Greene King Shares (representing approximately 0.050 per cent. of the existing issued ordinary share capital of Greene King) as at 16 August 2019, being the last Business Day prior to the date of this announcement.

·          Further details of these irrevocable undertakings (including the circumstances in which they cease to be binding) are set out in Appendix 3 to this announcement.

CKA Shareholder approval and irrevocable undertakings from CKA Shareholders

·          CK Bidco is a newly incorporated wholly-owned indirect subsidiary of CKA, which is a limited liability company incorporated in the Cayman Islands, registered in Hong Kong, and listed on the Main Board of the Hong Kong Stock Exchange.

·          As the Acquisition constitutes a major transaction of CKA pursuant to the Hong Kong Listing Rules, the Acquisition will be subject to approval by CKA Shareholders by simple majority.

·          The CKA Directors intend unanimously to recommend that CKA Shareholders vote in favour of the resolutions to approve and implement the Acquisition at the CKA General Meeting as the CKA Directors who have personal interests in any CKA Shares have irrevocably undertaken to do in respect of their own beneficial holdings totalling 481,758 CKA Shares (representing approximately 0.013 per cent. of the existing issued ordinary share capital of CKA) as at 16 August 2019, being the last Business Day prior to the date of this announcement.

·          In addition, CKA has agreed to procure that the relevant trustees of the Li family trusts provide to Greene King an irrevocable undertaking to vote in favour of, or procure that the registered holders vote in favour of, the resolutions relating to the Acquisition at the CKA General Meeting in respect of the 1,160,195,710 CKA Shares which they hold directly or indirectly (representing approximately 31.4 per cent. of the existing issued share capital of CKA as at 16 August 2019, being the last Business Day prior to the date of this announcement).

Background to and reasons for the Acquisition

·          CKA is a long-term and strategic investor in stable, profitable and cash flow generating businesses that benefit from real estate backing. CKA believes that the United Kingdom pub and brewing sector shares these characteristics and that pubs will continue to be an important part of British culture and the eating and drinking out market. CKA has invested in the United Kingdom pub sector and owns a small portfolio of freehold pubs, all of which are leased to the Greene King Group.

·          The specific attractions of Greene King include its: established position in the United Kingdom pub and brewing market; freehold and long leasehold backed property estate; and resilient financial profile.

·          CKA's strategic philosophy is to support management teams to develop and implement plans which create long-term value. This is underpinned by access to strong financial backing. CKA believes it has the financial resources to invest capital in new initiatives, where appropriate, to improve the sustainability, profitability and competitiveness of Greene King.

Timetable and Conditions

·          It is intended that the Acquisition will be implemented by way of a Court‑sanctioned scheme of arrangement under Part 26 of the Companies Act (although CK Bidco reserves the right to effect the Acquisition by way of a Takeover Offer, subject to the consent of the Panel). 

·          The Acquisition will be subject to the Conditions and further terms set out in Appendix 1 to this announcement, and to be set out in full in the Scheme Document, including, amongst others:

·          approvals of Greene King Shareholders and CKA Shareholders at the Greene King Meetings and the CKA General Meeting, respectively;

·          receipt of the required decision(s) from the European Commission; and

·          the sanction of the Scheme by the Court.

·          It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and Greene King General Meeting, together with the associated forms of proxy, will be posted to Greene King Shareholders within 28 days of this announcement (or such later time as Greene King, CK Bidco and the Panel agree) and the Greene King Meetings are expected to be held shortly thereafter. It is expected that the CKA Circular will be published by CKA on or about 16 September 2019, which is expected to be the same date as the date on which the Scheme Document is posted to Greene King Shareholders, with the CKA General Meeting being held on the same date as the Greene King Meetings. The Acquisition is currently expected to complete in the fourth quarter of 2019, subject to approval of Greene King Shareholders and CKA Shareholders and receipt of the required decision(s) from the European Commission and the sanction of the Scheme by the Court. An expected timetable of key events relating to the Acquisition will be provided in the Scheme Document.

Commenting on the Acquisition, George Colin Magnus, OBE, BBS, Non-executive Chairman Designate of CK Bidco, said:

"CKA's strategy is to look for businesses with stable and resilient characteristics and strong cash flow generating capabilities.  The UK pub and brewing sector shares these characteristics and we believe that this sector will continue to be an important part of British culture and the eating and drinking out market in the long run.  Greene King, being a leading integrated pub retailer and brewer with strong real estate backing, is well positioned to capture the opportunities that lie ahead.

We are proud of our track record in the UK and our philosophy is to support strong management teams and provide investee companies with access to patient capital in order to create sustainable long-term value."

Commenting on the prospect of working with Greene King's team, Gerald Ma, Executive Committee Member and General Manager, Corporate Business Development Department of CKA said:

"We have come to know Greene King well as we have been an owner of a portfolio of pubs which have been leased to them since late 2016.  We share the strategy which Greene King has set out in its recent results announcement, that is to focus efforts on developing the brand, enhancing the service offering, training and retaining talent, executing an active estate management strategy, and all under a prudent financial management policy.  I look forward to working closely with the management team as we embark on the next stage in the company's growth."

Commenting on the Acquisition, Philip Yea, Chairman of Greene King, said:

"The Greene King board is confident in the long term prospects of the business but believes this offer represents a good opportunity for shareholders to realise value for their investment at an attractive premium, while also ensuring the future success of Greene King for employees, partners, customers and suppliers. We are therefore unanimously recommending it to our shareholders."

Nick Mackenzie, Chief Executive of Greene King, added:

"Greene King has a well-invested estate in prime locations, leading brands, a rich history and a talented team of c.38,000 people serving millions of customers across the country every week.

CKA is an experienced UK investor and shares many of Greene King's business philosophies. They understand the strengths of our business and we welcome their commitment to working with the existing management team, evolving the strategy and investing in the business to ensure its continued long term growth."

This summary should be read in conjunction with the following announcement and the Appendices. The Conditions to, and certain further terms of, the Acquisition are set out in Appendix 1.  The bases and sources for certain financial information contained in this announcement are set out in Appendix 2.  Details of irrevocable undertakings are set out in Appendix 3 to this announcement. Certain definitions and terms used in this announcement are set out in Appendix 4.

Enquiries:

Clifford Chance LLP is acting as legal adviser to CKA and CK Bidco. Linklaters LLP is acting as legal adviser to Greene King.

Further information

HSBC Bank plc ("HSBC"), which is authorised by the PRA and regulated by the PRA and the FCA in the United Kingdom, is acting exclusively for CKA and CK Bidco and no one else in connection with the Acquisition and will not be responsible to anyone other than CKA and CK Bidco for providing the protections afforded to clients of HSBC nor for giving advice in relation to the Acquisition or any matter or arrangement referred to in this announcement. Neither HSBC, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of HSBC in connection with this announcement, any statement contained herein or otherwise. HSBC has given, and not withdrawn, its consent to the inclusion in this announcement of the references to its name in the form and context in which they appear.

Citigroup Global Markets Limited ("Citigroup"), which is authorised by the PRA and regulated in the UK by the FCA and the PRA, is acting exclusively as financial adviser to Greene King and no one else in connection with the Acquisition and other matters described in this announcement and shall not be responsible to anyone other than Greene King for providing the protections afforded to clients of Citigroup nor for providing advice in connection with the Acquisition or any matter referred to in this announcement.

 N.M. Rothschild and Sons Limited ("Rothschild & Co"), which is authorised and regulated by the FCA in the United Kingdom, is acting as financial adviser to Greene King and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Greene King for providing the protections afforded to clients of Rothschild & Co nor for providing advice in connection with any matter referred to herein. Neither Rothschild & Co nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Rothschild & Co in connection with this announcement, any statement contained herein, the Acquisition or otherwise.

Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for Greene King and for no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and the offer and will not be responsible to anyone other than Greene King for providing the protections afforded to its clients or for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this announcement.

This announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise.  The Acquisition will be made solely through the Scheme Document (or, if the Acquisition is implemented by way of a Takeover Offer, the offer document), which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition.  Any acceptance or other response to the Acquisition should be made only on the basis of the information in the Scheme Document (or, if the Acquisition is implemented by way of a Takeover Offer, the offer document).

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

This announcement has been prepared in accordance with English law, the Takeover Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

The availability of the Acquisition to Greene King Shareholders who are not resident in and citizens of the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their Greene King Shares with respect to the Scheme at the Court Meeting, or to appoint another person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. Further details in relation to Overseas Shareholders will be contained in the Scheme Document.

Unless otherwise determined by CK Bidco or required by the Takeover Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

In accordance with the Takeover Code, normal United Kingdom market practice and Rule 14e-5(b) of the US Exchange Act, Citigroup and its respective affiliates will continue to act as exempt principal trader in Greene King securities on the London Stock Exchange. These purchases and activities by exempt principal traders which are required to be made public in the United Kingdom pursuant to the Takeover Code will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com. This information will also be publicly disclosed in the United States to the extent that such information is made public in the United Kingdom.

Notice to US investors in Greene King

The Acquisition relates to the shares of an English company and is being made by means of a scheme of arrangement provided for under English company law.  A transaction effected by means of a scheme of arrangement is not subject to the tender offer or proxy solicitation rules under the US Securities Exchange Act of 1934 (the "US Exchange Act").  Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in the United Kingdom to schemes of arrangement which differ from the disclosure requirements of the US tender offer and proxy solicitation rules.  The financial information included in this announcement has been prepared in accordance with accounting standards applicable in the United Kingdom and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US.

If, in the future, CK Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, which is to be made into the US, such Takeover Offer will be made in compliance with the applicable US laws and regulations, including Section 14(e) and Regulation 14E under the US Exchange Act.

It may be difficult for US holders of Greene King Shares and Greene King ADR Holders to enforce their rights and any claim arising out of the US federal laws, since CK Bidco and Greene King are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of Greene King Shares and Greene King ADR Holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

Neither the US Securities and Exchange Commission nor any US state securities commission has approved or disapproved of the Acquisition, or determined if this announcement is accurate or complete. Any representation to the contrary is a criminal offence in the US.

US Greene King Shareholders and Greene King ADR Holders also should be aware that the transaction contemplated herein may have tax consequences in the US and, that such consequences, if any, are not described herein. US Greene King Shareholders and Greene King ADR Holders are urged to consult with legal, tax and financial advisers in connection with making a decision regarding this transaction.

Forward looking statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition, and other information published by CK Bidco and Greene King contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of CK Bidco and Greene King about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.

The forward-looking statements contained in this announcement include statements relating to the expected effects of the Acquisition on CK Bidco and Greene King (including their future prospects, developments and strategies), the expected timing and scope of the Acquisition and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "projects", "strategy", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although CK Bidco and Greene King believe that the expectations reflected in such forward-looking statements are reasonable, CK Bidco and Greene King can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to complete the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms and schedule; as future market conditions, changes in general economic and business conditions, the behaviour of other market participants, the anticipated benefits from the proposed transaction not being realised as a result of changes in general economic and market conditions in the countries in which CK Bidco and Greene King operate, weak, volatile or illiquid capital and/or credit markets, changes in tax rates, interest rate and currency value fluctuations, the degree of competition in the geographic and business areas in which CK Bidco and Greene King operate and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither CK Bidco nor Greene King, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place any reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations, neither CK Bidco nor Greene King is under any obligation, and CK Bidco and Greene King expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on a website

This announcement and the documents required to be published pursuant to Rule 26.1 of the Takeover Code will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on CKA's website at https://webfilter.ckah.com/WF06/ and on Greene King's website at https://www.greeneking.co.uk/investor-centre/ promptly and in any event by no later than 12 noon (London time) on the Business Day following the  publication of this announcement.  The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

No profit forecasts, estimates or quantified benefits statements

Nothing in this announcement is intended, or is to be construed, as a profit forecast, profit estimate or quantified benefits statement for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for Greene King for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Greene King.

Requesting hard copy documents

In accordance with Rule 30.3 of the Takeover Code, Greene King Shareholders, persons with information rights and participants in the Greene King Share Plans may request a hard copy of this announcement by contacting Greene King's registrars, Link Asset Services, during business hours on 0871 664 0300 (or +44(0) 371 664 0300 from abroad) or at The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU. For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. Such persons may also request that all future documents, announcements and information to be sent to you in relation to the Acquisition should be in hard copy form.

Electronic Communications

Please be aware that addresses, electronic addresses and certain other information provided by Greene King Shareholders, persons with information rights and other relevant persons for the receipt of communications from Greene King may be provided to CK Bidco during the offer period as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c).

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.

Rule 2.9 of the Takeover Code

For the purposes of Rule 2.9 of the Takeover Code, Greene King confirms that, as at 16 August 2019, it had in issue 310,011,031 ordinary shares of 12.5 pence each. The ISIN for the shares is GB00B0HZP136.

Greene King has in place the Greene King ADR programme sponsored and administered by Deutsche Bank Trust Company Americas. One Greene King ADR represents two Greene King Shares. The Greene King ADRs are traded over-the-counter. The ISIN for the Greene King ADRs is US3947022030.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

19 August 2019

RECOMMENDED CASH ACQUISITION

of

GREENE KING PLC

by

CK NOBLE (UK) LIMITED

(a wholly-owned subsidiary of CK Asset Holdings Limited)

to be effected by means of a Scheme of Arrangement

under Part 26 of the Companies Act 2006

1.         Introduction

The boards of CK Noble (UK) Limited ("CK Bidco") and Greene King plc ("Greene King") are pleased to announce that they have agreed the terms of a recommended cash offer by CK Bidco for the entire issued and to be issued share capital of Greene King, not already owned by or on behalf of the CKA Group.

It is intended that the Acquisition will be implemented by way of a Court‑sanctioned scheme of arrangement under Part 26 of the Companies Act (although CK Bidco reserves the right to effect the Acquisition by way of a Takeover Offer, subject to the consent of the Panel).

2.         The Acquisition

The Acquisition, which will be on the terms and subject to the Conditions and further terms set out in Appendix 1 to this announcement, and to be set out in full in the Scheme Document, will be made on the following basis:

In addition, the Acquisition allows for the distribution of the previously announced final dividend for the 52 weeks ended 28 April 2019 of 24.4 pence per Greene King Share to be paid (subject to approval by Greene King Shareholders at Greene King's upcoming annual general meeting) on 13 September 2019 to Greene King Shareholders on the register as at the close of business on 9 August 2019 (the "Final Dividend").

The Cash Consideration under the terms of the Acquisition values the entire issued and to be issued share capital of Greene King at approximately £2.7 billion on a fully diluted basis and implies an enterprise value approximately of £4.6 billion. The Cash Consideration represents:

·          a premium of approximately 51.0 per cent. to the Closing Price of 563 pence per Greene King Share on 16 August 2019 (being the last Business Day prior to the date of this announcement);

·          a premium of approximately 42.8 per cent. to the adjusted three month volume weighted average price of 595 pence per Greene King Share to 16 August 2019 (being the last Business Day prior to the date of this announcement);

·          a premium of approximately 39.6 per cent. to the adjusted six month volume weighted average price of 609 pence per Greene King Share to 16 August 2019 (being the last Business Day prior to the date of this announcement); and

·          an enterprise value multiple of approximately 9.5x Greene King's EBITDA of £482 million for the 52 week period to 28 April 2019, or 10.0x including the fair value of interest rate swap liabilities as at 28 April 2019.

If, on or after the date of this announcement and before the Effective Date, any dividend and/or other distribution and/or return of capital (other than the Final Dividend) is declared, made or paid or becomes payable in respect of the Greene King Shares, CK Bidco reserves the right to reduce the Cash Consideration payable under the terms of the Acquisition for the Greene King Shares by an amount up to the amount of such dividend and/or other distribution and/or return of capital, in which case any reference in this announcement to the Cash Consideration payable under the terms of the Acquisition will be deemed to be a reference to the Cash Consideration as so reduced.  In such circumstances, Greene King Shareholders would be entitled to retain any such dividend and/or other distribution and/or return of capital.

3.         Background to and reasons for the Acquisition

CKA is a long-term and strategic investor in stable, profitable and cash flow generating businesses that benefit from real estate backing. CKA believes that the United Kingdom pub and brewing sector shares these characteristics and that pubs will continue to be an important part of British culture and the eating and drinking out market. CKA has invested in the United Kingdom pub sector and owns a small portfolio of freehold pubs, all of which are leased to the Greene King Group.

The specific attractions of Greene King include its: established position in the United Kingdom pub and brewing market; freehold and long leasehold backed property estate; and resilient financial profile.

The CKA Board believes that the CKA Group would benefit from the Acquisition as it represents an attractive investment opportunity for CKA's investors. The Acquisition is consistent with CKA's global diversification policy and is in accordance with CKA's investment criteria. Upon the Acquisition becoming Effective, the CKA Group is expected to benefit from being able to extend its reach to other business areas and the stable recurrent income generated from such reach, and from consolidating its holdings in and through the United Kingdom.

CKA's strategic philosophy is to support management teams to develop and implement plans which create long-term value. This is underpinned by access to strong financial backing. CKA believes it has the financial resources to invest capital in new initiatives, where appropriate, to improve the sustainability, profitability and competitiveness of Greene King.

CKA looks forward to working with all stakeholders of the Greene King business, including its existing management, employees and tenants, to enhance Greene King's long term value and market position.

4.         Recommendation

The Greene King Directors, who have been so advised by Citigroup and Rothschild & Co as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable.  In providing advice to the Greene King Directors, Citigroup and Rothschild & Co have taken into account the commercial assessments of the Greene King Directors.

Accordingly, the Greene King Directors intend unanimously to recommend that Greene King Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions relating to the Acquisition at the Greene King General Meeting as the Greene King Directors who hold Greene King Shares have irrevocably undertaken to do in respect of their own beneficial holdings totalling 155,026 Greene King Shares (representing approximately 0.050 per cent. of the existing issued ordinary share capital of Greene King) as at 16 August 2019, being the last Business Day prior to the date of this announcement. 

Further details of these irrevocable undertakings are set out in Appendix 3 to the announcement.

5.         Background to and reasons for the recommendation

Greene King's overall strategic objective is to be the best pub and brewing company in Britain. To achieve this, Greene King has pursued a consistent strategy which is built on five key pillars: building distinct brands that more customers choose; providing offers that deliver compelling value, service and quality; developing engaged and high performing teams; maintaining a well-located and invested estate; and executing prudent financial management.

In June 2015, Greene King completed the acquisition of Spirit Pub Company plc ("Spirit") to create the UK's leading integrated pub company. The integration of Spirit was completed a year ahead of schedule and realised synergies in excess of those announced at the time of the acquisition. Since then, Greene King has consolidated its position as the leading integrated UK pub company and at 28 April 2019 the company operated 2,730 pubs, restaurants and hotels across England, Wales and Scotland, of which 1,687 were retail pubs, restaurants and hotels and 1,043 were tenanted, leased and franchised pubs.

In recent years there has been substantial industry change combined with increased macroeconomic and political uncertainty. During this time, the Greene King Board has taken a number of strategic decisions to continue to deliver value for Greene King Shareholders. Through its focus on Value, Service and Quality (VSQ), Greene King has continued to invest effectively in its high-quality estate and its four leading core brands (Greene King Local Pubs, Chef & Brewer, Farmhouse Inns and Hungry Horse). It has also proactively managed its assets, successfully refinanced (since June 2017 the Greene King Group has repaid a total of £487 million of Spirit secured bonds which represents 63 per cent. of the nominal value of the Spirit secured debt outstanding as at 30 April 2017) and delivered value to Greene King Shareholders through Greene King's sustainable dividend policy, reduced costs and increased balance sheet flexibility.

Greene King performed strongly for the 52 weeks ended 28 April 2019, "Pub  Company" like-for-like sales outperformed the market at +2.9 per cent., driven by effective investment in VSQ. "Pub Partners" delivered like-for-like net income of +1.5 per cent. Like-for-like growth was achieved whilst successfully limiting the impact of cost inflation affecting the broader industry with £35 million of mitigation, limiting cost inflation to £14 million.

The Greene King Board is fully confident in the ongoing execution of its strategy under the leadership of Nick Mackenzie (who was appointed as CEO on 1 May 2019) and that this strategy will continue to deliver long-term value for Greene King Shareholders. However, the Greene King Board believes that the terms of the Acquisition recognise the quality of Greene King's business, its potential and longer term prospects. In reaching its conclusion, the Greene King Board considered:

·    the terms of the Acquisition in relation to the value and prospects of Greene King's business;

·    that the Cash Consideration under the Acquisition represents the premia and enterprise value / EBITDA multiples set out in paragraph 2 above;

·    the impact of the Acquisition on all stakeholders, including CKA's intentions for the Greene King business, including its name, brand, business mix, ongoing investment and continuing head office presence in Bury St Edmunds, and support centre in Burton upon Trent and the assurances given by CK Bidco in relation to Greene King employees; and

·    that the Acquisition provides Greene King Shareholders with the opportunity to receive full cash value for Greene King now, without any of the inherent execution, industry and macroeconomic risks facing the business.

Accordingly, following careful consideration of the above factors, the Greene King Board intends unanimously to recommend the offer to Greene King Shareholders.

6.         CKA General Meeting and irrevocable undertakings from CKA Shareholders

As the Acquisition constitutes a major transaction of CKA pursuant to the Hong Kong Listing Rules, the Acquisition will be subject to approval by CKA Shareholders by simple majority and a general meeting of CKA will be convened for this purpose.

The CKA Directors intend unanimously to recommend that CKA Shareholders vote in favour of the resolutions to approve and implement the Acquisition at the CKA General Meeting as the CKA Directors who have personal interests in any CKA Shares have irrevocably undertaken to do in respect of their own beneficial holdings totalling 481,758 CKA Shares (representing approximately 0.013 per cent. of the existing issued ordinary share capital of CKA) as at 16 August 2019, being the last Business Day prior to the date of this announcement.

In addition, CKA has agreed to procure that the relevant trustees of the Li family trusts provide to Greene King an irrevocable undertaking to vote in favour of, or procure that the registered holders vote in favour of, the resolutions relating to the Acquisition at the CKA General Meeting in respect of the 1,160,195,710 CKA Shares which they hold directly or indirectly (representing approximately 31.4 per cent. of the existing issued share capital of CKA as at 16 August 2019, being the last Business Day prior to the date of this announcement).

7.         Directors, management, employees, pensions, research and development and locations

CK Bidco's strategic plans for Greene King

CK Bidco regards the Greene King brand as a cornerstone of Greene King's success and, following the Acquisition becoming Effective, intends that Greene King will continue to operate as a standalone business group and will retain the current company name. CK Bidco supports Greene King's current strategy and intends to work with the existing Greene King management team to develop and implement the strategy following the Acquisition becoming Effective. CK Bidco acknowledges that Greene King has recently published its Capital Allocation Policy which contains a shared philosophy of generating cash to re-invest in the business where return thresholds are met and to meet other external commitments. Greene King disposes of non-core pubs and/or transfers pubs between "Pub Company" and "Pub Partners" as part of its ongoing estate optimisation programme(s), and CK Bidco intends to continue to support such programme(s) following the Effective Date. Absent new investment opportunities, a material change in asset value or in market circumstances, CK Bidco does not intend to significantly change Greene King's current business composition of "Pub Company", "Pub Partners" and "Brewing & Brands".

Following the Acquisition becoming Effective, CK Bidco intends to procure that Greene King continues to operate within the terms of its current securitisation arrangements and not to seek to amend these structures without the consent of bondholders or the agreement of the bond trustee. The Acquisition will be funded by existing cash resources within the CKA Group and will not be reliant on Greene King's dividends.

Existing employment rights and pensions

CK Bidco greatly values the skills, knowledge and expertise of Greene King's existing management and employees and therefore CK Bidco does not intend to make material changes with regard to the continued employment of the employees and management of the Greene King Group (including the conditions of employment or the balance of skills and functions of the employees and management), nor does CK Bidco intend to initiate any material headcount reductions within the Greene King organisation as a result of the Acquisition, although it is expected that each of the Greene King non-executive directors will resign as directors of Greene King on or shortly after the Effective Date. CK Bidco intends to continue to support Greene King's apprentice scheme.

CK Bidco confirms that, following the Effective Date, the existing contractual and statutory employment rights, including in relation to pensions, of all Greene King management and employees will be fully safeguarded in accordance with applicable law.

Greene King's defined benefit pension schemes are closed to new members and future accruals. CK Bidco does not intend to make any changes to the current employer pension contribution arrangements (including with regard to current arrangements for the funding of any scheme deficit), the accrual of benefits for existing members or the closure of admission of new members. Following the Acquisition becoming Effective, CK Bidco intends to work with the pension trustees to maintain or optimise the future investment strategy of the pension schemes.

Management incentive arrangements

Following the Acquisition becoming Effective, CK Bidco intends to review management incentive structures and to put in place cash-based long-term incentive plans, focusing on profitability, return on equity, cash generation and operational quality relating to the Greene King business, to replace the Greene King Performance Share Plan 2013 which will come to an end as a result of the Acquisition. Except as described below, CK Bidco has not had any detailed discussions on proposals to enter into any form of incentivisation arrangements for or with members of Greene King's management.

In order to promote the retention of certain Greene King employees (including the Greene King executive directors) following the Effective Date, CK Bidco has agreed that, following the Effective Date, it will grant to employees who held awards granted on or after 1 May 2018 under the Greene King Performance Share Plan 2013 immediately prior to the Court Order ("Relevant Awards") cash bonuses payable on 30 July 2021 subject to continued employment (the "Transition Awards"). The value of each eligible participant's Transition Award will be calculated by reference to an agreed formula based on the value of the participant's Relevant Awards that lapsed due to the Acquisition.

As required by, and solely for the purposes of Rule 16.2 of the Takeover Code, Citigroup and Rothschild & Co have (in their capacity as independent advisors to Greene King for the purposes of Rule 3 of the Takeover Code) reviewed the terms of the Transition Awards together with other information deemed relevant and advised Greene King that the Transition Awards are fair and reasonable so far as the Greene King Shareholders are concerned. In providing their advice, Citigroup and Rothschild & Co have taken into account the commercial assessments of the Greene King Directors.

Headquarters, fixed assets and research and development

CK Bidco intends to keep Greene King's headquarters and headquarter functions in Bury St. Edmunds and its support centre in Burton upon Trent following the Effective Date and does not intend to make any material changes in the locations of Greene King's places of business (including its existing business support centres in other locations) beyond the ordinary course pub investments, divestments or transfers consistent with previous years as part of Greene King's ongoing estate optimisation programme(s) referred to above.

No changes are envisaged by CK Bidco with respect to the redeployment of Greene King's fixed asset base. Greene King does not currently have a research and development function and CK Bidco has no plans in this regard.

Corporate governance and social responsibility

CKA is committed to good corporate governance and, following the de-listing of Greene King, CK Bidco intends to procure that Greene King adopts a governance code appropriate to its status as a large UK incorporated private limited company and a member of a Hong Kong listed group and maintains or enhances those key control processes and procedures which continue to be relevant to Greene King, including compliance with the Pub's Code, applicable accounting and tax reporting standards and its approach to corporate social responsibility.

None of the statements in this paragraph 7 are "post-offer undertakings" for the purposes of Rule 19.5 of the Takeover Code.

8.         Information relating to CK Bidco and CKA

CK Bidco

CK Bidco is a newly incorporated wholly owned indirect subsidiary of CKA. CK Bidco is a private limited company incorporated in England and Wales.

CK Bidco has not traded since incorporation, nor has it entered into any obligations, other than in connection with the Acquisition.

CKA

CKA is a limited liability company incorporated in the Cayman Islands, which is registered in Hong Kong, and is listed on the Main Board of the Hong Kong Stock Exchange.

CKA is a leading multinational corporation and has diverse capabilities with activities encompassing property development and investment, hotel and serviced suite operation, property and project management, investment in infrastructure and utility asset operation and aircraft leasing.

Further details in relation to CK Bidco and CKA will be contained in the Scheme Document.

9.         Information relating to Greene King

Greene King is the UK's leading integrated pub retailer and brewer operating over 2,700 pubs, restaurants and hotels across England, Wales and Scotland and has a proud history of brewing award-winning ales for more than 200 years. Greene King's three main trading divisions are "Pub Company", "Pub Partners" and "Brewing & Brands".

Since the acquisition of Spirit in 2015, Greene King has successfully consolidated its Pub Company portfolio of managed pubs around four leading retail brands: Greene King Local Pubs, Chef & Brewer, Farmhouse Inns and Hungry Horse.

As at 28 April 2019, Greene King had 1,687 managed pubs, restaurants and hotels.

Greene King's Pub Partners business offers people the opportunity to run Greene King's pubs on a tenanted, leased or franchised basis. As at 28 April 2019 Greene King had 1,043 primarily wet-led sites in Greene King's Pub Partners estate, of which the majority are run under brewery-tied tenancy agreements.

81 per cent. of the Greene King estate was either freehold or long leasehold as at 28 April 2019.

Greene King's Brewing & Brands business brews, sells and distributes a wide range of award-winning ales to both the on and off trade. These are brewed in one of Greene King's two breweries, in Bury St Edmunds, Suffolk and Dunbar, Scotland. The strategy is focused on Greene King's core brands: Greene King IPA, the fastest-selling national cask ale brand in the on-trade; Old Speckled Hen, the UK's number one premium ale brand by volume; Abbot Ale, the UK's number one premium cask ale brand; and Belhaven Best, the number one ale brand in Scotland.

The total number of Greene King employees as at 28 April 2019 was c.38,000.

For the 52 week financial period ended 28 April 2019, Greene King's revenue was £2,216.9 million and its operating profit before exceptional and non-underlying items was £368.2 million. Profit before tax and exceptional and non-underlying items was £246.9 million, while adjusted basic earnings per share were 64.5 pence. Net profit before tax was £172.8 million, net profit after tax was £120.4 million and net assets were £2,107.9 million.

For the 52 week financial period ended 29 April 2018, Greene King's revenue was £2,176.7 million and its operating profit before exceptional and non-underlying items was £373.1 million. Profit before tax and exceptional and non-underlying items was £243.0 million, while adjusted basic earnings per share were 62.7 pence. Net profit before tax was £197.5 million, net profit after tax was £183.3 million and net assets were £2,073.1 million.

10.       Financing of the Acquisition

The Cash Consideration payable by CK Bidco pursuant to the Acquisition will be funded from the existing cash resources of the CKA Group.

HSBC, as financial adviser to CKA and CK Bidco, is satisfied that sufficient resources are available to CK Bidco to satisfy in full the Cash Consideration payable to Greene King Shareholders under the terms of the Acquisition.

11.       Greene King Share Plans

Participants in the Greene King Share Plans will be contacted regarding the effect of the Acquisition on their options and awards under the Greene King Share Plans and appropriate proposals, where required, will be made to such participants in due course. Details of the proposals will be set out in the Scheme Document and in separate letters to be sent to participants in the Greene King Share Plans.

The Acquisition will extend to any Greene King Shares which are unconditionally allotted or issued at or before the Scheme Record Time, including those allotted or issued to satisfy the exercise of options or vesting of awards under the Greene King Share Plans.

The Scheme will not extend to Greene King Shares issued after the Scheme Record Time. However, it is proposed to amend Greene King's articles of association at the Greene King General Meeting to provide that, if the Acquisition becomes Effective, any Greene King Shares issued to any person other than CK Bidco or its nominees after the Scheme Record Time (including in satisfaction of an option exercised under one of the Greene King Share Plans) will be automatically transferred to CK Bidco in consideration for the payment by CK Bidco to such persons of an amount equal to the Cash Consideration available under the terms of the Acquisition for each Greene King Share so transferred.

12.       Offer-related arrangements

Confidentiality Agreement

On 17 July 2019, CKA and Greene King entered into a confidentiality agreement (the "Confidentiality Agreement") in relation to the Acquisition, pursuant to which, amongst other things, CKA has undertaken to keep confidential information relating to Greene King and to the Acquisition and not to disclose it to third parties (with certain exceptions). These confidentiality obligations will remain in force until the second anniversary of the date of the Confidentiality Agreement. The Confidentiality Agreement contains standstill provisions which restricted CKA from acquiring or seeking to acquire interests in certain securities of Greene King; with those restrictions ceasing to apply upon the release of this announcement. The Confidentiality Agreement contains provisions pursuant to which CKA has agreed not to solicit certain employees of Greene King's Group, subject to customary carve-outs, for a period of 12 months from the date of the Confidentiality Agreement. 

Cooperation Agreement

On 19 August 2019, CKA, CK Bidco and Greene King entered into a cooperation agreement (the "Cooperation Agreement"), pursuant to which, among other things (i)  CKA and CK Bidco have agreed to use all reasonable efforts to satisfy the antitrust condition in paragraph 3(b) of Part A of Appendix 1 to this announcement and Greene King has agreed to cooperate for the purposes of ensuring the satisfaction of such Condition; (ii) each of CKA and CK Bidco have agreed to provide Greene King with certain information for the purposes of the Scheme Document and to otherwise assist with the preparation of the Scheme Document; (iii) Greene King has agreed to provide CKA with certain information for the purposes of the CKA Circular and to otherwise assist with the preparation of the CKA Circular; and (iv) CKA, CK Bidco and Greene King have agreed provisions that will apply in respect of the Greene King Share Plans and certain other employee incentive arrangements.

The Cooperation Agreement will terminate in certain circumstances, including (subject to certain exceptions): (i) at CKA and CK Bidco's election if (a) the Greene King Directors make a Greene King Adverse Recommendation Change, (b) a third party announces a firm intention to make an offer for Greene King which is recommended by the Greene King Directors, (c) Greene King announces that it will not convene the Greene King General Meeting or Court Meeting or it does not intend to publish the Scheme Document or, (d) once published, the date set out in the Scheme Document for the Greene King General Meeting and Court Meeting is more than 28 days after the date of the Scheme Document, unless such later date is to ensure such meetings are held later than, but on the same date as, the CKA General Meeting; (ii) at Greene King's election if there is a CKA Board Recommendation Change; (iii) if a competing proposal becomes effective or is declared or becomes unconditional in all respects; (iv) if the Acquisition lapses, terminates or is withdrawn on or prior to the Long Stop Date, including where a Condition has not been satisfied and has been successfully invoked by CK Bidco; (v) at the election of CKA, CK Bidco or Greene King following the occurrence of a break fee event (as described below); and (vi) as otherwise agreed between CKA, CK Bidco and Greene King.

CKA has undertaken to pay a break fee to Greene King of £53.1 million if:

·          both of the following events occur:

·          CKA fails to procure that, not later than five Business Days after the CKA Circular has been despatched to CKA Shareholders, the relevant trustees of the Li family trusts provide to Greene King an irrevocable undertaking to vote in favour of the resolutions relating to the Acquisition at the CKA General Meeting, or the relevant trustees of the Li family trusts fail to vote their CKA Shares in favour of such resolutions at the CKA General Meeting in accordance with such irrevocable undertaking; and

·          with a vote having been held on the resolutions relating to the Acquisition at a CKA General Meeting, the resolutions are not passed by the CKA Shareholders; or

·          CKA fails to include the CKA Board Recommendation in the CKA Circular or there is a CKA Board Recommendation Change prior to the CKA General Meeting and either: (i) the CKA General Meeting is not held in sufficient time to enable completion of the Acquisition to occur by the Long Stop Date; or (ii) with a vote having been held on the resolutions relating to the Acquisition at a CKA General Meeting, the resolutions are not passed by the CKA Shareholders; or

·          any of the CKA Directors or CK Bidco Directors, Mr Li Ka-shing or any of the members of the executive committee of CKA make a public statement at or prior to the CKA General Meeting which is reasonably likely to have an adverse effect on the passing of the resolutions relating to the Acquisition at the CKA General Meeting and with a vote having been held on the resolutions relating to the Acquisition at a CKA General Meeting, the resolutions are not passed by the CKA Shareholders.

However, no break fee will be payable if: (i) at the time of the relevant break fee event the Cooperation Agreement has already been terminated, (ii) the relevant break fee event has been caused by Greene King's material breach of its obligations under certain provisions of the Cooperation Agreement; or (iii) prior to the time of the relevant break fee event, there has been a Greene King Adverse Recommendation Change.

13.       Scheme process and Conditions to the Acquisition

It is intended that the Acquisition shall be effected by means of a Court-approved scheme of arrangement between Greene King and the Greene King Shareholders under Part 26 of the Companies Act.

The effect of the Scheme is to provide for CK Bidco to become the holder of the entire issued and to be issued ordinary share capital of Greene King. This is to be achieved by the transfer of the Greene King Shares to CK Bidco, in consideration for which the Greene King Shareholders who are on the register of members at the Scheme Record Time shall receive the Cash Consideration on the basis set out in paragraph 2 of this announcement.

CKA has an indirect interest in Greene King Shares held via a wholly-owned subsidiary of CKA (being 8,990,182 Greene King Shares representing approximately 2.9 per cent. of the existing issued ordinary share capital of Greene King as at 16 August 2019, being the last Business Day prior to the date of this announcement), which will not be Scheme Shares and will not be acquired by CK Bidco pursuant to the Acquisition. CKA's wholly-owned subsidiary who is the registered holder of the 8,990,182 Greene King Shares will not be permitted to vote such Greene King Shares at the Court Meeting, but will be permitted to vote such Greene King Shares at the Greene King General Meeting.

To become Effective, the Scheme requires, among other things:

·          the approval of a majority in number of the Greene King Shareholders who are present and vote, whether in person or by proxy, at the Court Meeting and who represent not less than 75 per cent. in value of the Greene King Shares voted by those Greene King Shareholders;

·          the passing of the resolutions necessary to implement the Acquisition at the Greene King General Meeting (which will require the approval of Greene King Shareholders representing at least 75 per cent. of the votes cast at the Greene King General Meeting either in person or by proxy);

·          the approval of CKA Shareholders at the CKA General Meeting;

·          receipt of the required decision(s) from the European Commission; and

·          the sanction of the Scheme by the Court and, following such sanction, the delivery of a copy of the Court Order to the Registrar of Companies.

The Conditions in paragraph 2 of Appendix 1 to this announcement provide that the Scheme will lapse if:

·          the Court Meeting and the Greene King General Meeting are not held by the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course (or such later date as may be agreed between CK Bidco and Greene King);

·          the Sanction Hearing to approve the Scheme is not held by the 22nd day after the expected date of such hearing to be set out in the Scheme Document in due course (or such later date as may be agreed between CK Bidco and Greene King); and

·          the Scheme does not become effective by 11.59 p.m. on the Long Stop Date,

provided however that the deadlines for the timing of the Court Meeting, the Greene King General Meeting and the Sanction Hearing as set out above may be waived by CK Bidco, and the Long Stop Date may be extended by agreement between Greene King and CK Bidco.

If any Condition in paragraph 2 of Appendix 1 to this announcement is not capable of being satisfied by the date specified therein, CK Bidco shall make an announcement through a Regulatory Information Service as soon as practicable and, in any event, by not later than 7.00 a.m. on the Business Day following the date so specified, stating whether CK Bidco has invoked that Condition, (where applicable) waived that Condition or, with the agreement of Greene King, specified a new date by which that Condition must be satisfied.

Upon the Scheme becoming effective, it shall be binding on all Greene King Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the Greene King General Meeting.

It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and Greene King General Meeting, together with the associated forms of proxy, will be posted to Greene King Shareholders within 28 days of this announcement (or such later time as Greene King, CK Bidco and the Panel agree) and the Greene King Meetings are expected to be held shortly thereafter. It is expected that the CKA Circular will be published by CKA on or about 16 September 2019, which is expected to be the same date as the date on which the Scheme Document is posted to Greene King Shareholders, with the CKA General Meeting being held on the same date as the Greene King Meetings.

Subject to the satisfaction of the Conditions, the Scheme is expected to become effective in the fourth quarter of 2019.

14.       Delisting, cancellation of trading and re‑registration

It is intended that the London Stock Exchange and the FCA will be requested respectively to cancel trading in Greene King Shares on the London Stock Exchange's market for listed securities and the listing of the Greene King Shares from the Official List on or shortly after the Effective Date.

It is expected that the last day of dealings in Greene King Shares on the Main Market of the London Stock Exchange is expected to be the date of the Sanction Hearing and no transfers will be registered after 6.00 p.m. (London time) on that date.

It is intended that, following the Effective Date, Greene King's ADR programme will be terminated. Further details in relation to Greene King's ADR programme will be contained in the Scheme Document.

It is intended that Greene King be re‑registered as a private limited company as soon as practicable on or following the Effective Date.

15.       Disclosure of interests in Greene King securities

As at the close of business on 16 August 2019 (being the last Business Day prior to the date of this announcement), CKA had an indirect interest in Greene King Shares held via a wholly-owned subsidiary of CKA (being 8,990,182 Greene King Shares representing approximately 2.9 per cent. of the existing issued ordinary share capital of Greene King as of such date).

Save as disclosed in this announcement, as at the close of business on 16 August 2019 (being the last Business Day prior to the date of this announcement) neither CK Bidco, nor any of its directors, nor, so far as CK Bidco is aware, any person acting in concert (within the meaning of the Takeover Code) with it for the purposes of the Acquisition: (i) had any interest in or right to subscribe for or had borrowed or lent any Greene King Shares or securities convertible or exchangeable into Greene King Shares; or (ii) had any short positions in respect of relevant securities of Greene King (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery; or (iii) has borrowed or lent any relevant securities of Greene King (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Takeover Code) save for any borrowed shares which have been either on-lent or resold; or (iv) is a party to any dealing arrangement of the kind referred to in Note 11 on the definition of acting in concert in the Takeover Code.

It has not been practicable for CK Bidco to make enquiries of all of its concert parties in advance of the release of this announcement. Therefore, if CK Bidco becomes aware, following the making of such enquiries, that any of its concert parties have any additional interests in the relevant securities of Greene King, all relevant details in respect of CK Bidco's concert parties will be included in CK Bidco's Opening Position Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Takeover Code which must be made on or before 12 noon (London time) on 2 September 2019.

16.       Documents

Copies of the following documents will be available promptly on CKA's website and Greene King's website, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, at https://webfilter.ckah.com/WF06/ and https://www.greeneking.co.uk/investor-centre/ respectively and in any event by no later than 12 noon (London time) on the Business Day following the publication of this announcement:

(a)        this announcement;

(b)        the Confidentiality Agreement;

(c)        the Cooperation Agreement; and

(d)        the irrevocable undertakings of the Greene King Directors referred to in paragraph 4 and the irrevocable undertakings of the CKA Directors referred to in paragraph 6 above.

The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

17.       General

The Acquisition will be on the terms and subject to the Conditions set out in Appendix 1, and to be set out in full in the Scheme Document. 

The Greene King Shares will be acquired pursuant to the Acquisition with full title guarantee, fully paid and free from all liens, charges, equities, encumbrances, rights of pre‑emption and any other interests of any nature whatsoever and together with all rights attaching thereto, including without limitation voting rights and the right to receive and retain in full all dividends and other distributions (if any) announced, declared, made or paid with a record date on or after the Scheme Record Time.

This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.

Enquiries:

Clifford Chance LLP is acting as legal adviser to CKA. Linklaters LLP is acting as legal adviser to Greene King.

Further information

HSBC Bank plc ("HSBC"), which is authorised by the PRA and regulated by the PRA and the FCA in the United Kingdom, is acting exclusively for CKA and CK Bidco and no one else in connection with the Acquisition and will not be responsible to anyone other than CKA and CK Bidco for providing the protections afforded to clients of HSBC nor for giving advice in relation to the Acquisition or any matter or arrangement referred to in this announcement. Neither HSBC, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of HSBC in connection with this announcement, any statement contained herein or otherwise. HSBC has given, and not withdrawn, its consent to the inclusion in this announcement of the references to its name in the form and context in which they appear.

Citigroup Global Markets Limited ("Citigroup"), which is authorised by the PRA and regulated in the UK by the FCA and the PRA, is acting exclusively as financial adviser to Greene King and no one else in connection with the Acquisition and other matters described in this announcement and shall not be responsible to anyone other than Greene King for providing the protections afforded to clients of Citigroup nor for providing advice in connection with the Acquisition or any matter referred to in this announcement.

N.M. Rothschild and Sons Limited ("Rothschild & Co"), which is authorised and regulated by the FCA in the United Kingdom, is acting as financial adviser to Greene King and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Greene King for providing the protections afforded to clients of Rothschild & Co nor for providing advice in connection with any matter referred to herein. Neither Rothschild & Co nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Rothschild & Co in connection with this announcement, any statement contained herein, the Acquisition or otherwise.

Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for Greene King and for no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and the offer and will not be responsible to anyone other than Greene King for providing the protections afforded to its clients or for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this announcement.

This announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise.  The Acquisition will be made solely through the Scheme Document (or, if the Acquisition is implemented by way of a Takeover Offer, the offer document), which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition.  Any acceptance or other response to the Acquisition should be made only on the basis of the information in the Scheme Document (or, if the Acquisition is implemented by way of a Takeover Offer, the offer document).

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

This announcement has been prepared in accordance with English law, the Takeover Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

The availability of the Acquisition to Greene King Shareholders who are not resident in and citizens of the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their Greene King Shares with respect to the Scheme at the Court Meeting, or to appoint another person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. Further details in relation to Overseas Shareholders will be contained in the Scheme Document.

Unless otherwise determined by CK Bidco or required by the Takeover Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

In accordance with the Takeover Code, normal United Kingdom market practice and Rule 14e-5(b) of the US Exchange Act, Citigroup and its respective affiliates will continue to act as exempt principal trader in Greene King securities on the London Stock Exchange. These purchases and activities by exempt principal traders which are required to be made public in the United Kingdom pursuant to the Takeover Code will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com. This information will also be publicly disclosed in the United States to the extent that such information is made public in the United Kingdom.

Notice to US investors in Greene King

The Acquisition relates to the shares of an English company and is being made by means of a scheme of arrangement provided for under English company law.  A transaction effected by means of a scheme of arrangement is not subject to the tender offer or proxy solicitation rules under the US Securities Exchange Act of 1934 (the "US Exchange Act").  Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in the United Kingdom to schemes of arrangement which differ from the disclosure requirements of the US tender offer and proxy solicitation rules.  The financial information included in this announcement has been prepared in accordance with accounting standards applicable in the United Kingdom and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US.

If, in the future, CK Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, which is to be made into the US, such Takeover Offer will be made in compliance with the applicable US laws and regulations, including Section 14(e) and Regulation 14E under the US Exchange Act.

It may be difficult for US holders of Greene King Shares and Greene King ADR Holders to enforce their rights and any claim arising out of the US federal laws, since CK Bidco and Greene King are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of Greene King Shares and Greene King ADR Holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

Neither the US Securities and Exchange Commission nor any US state securities commission has approved or disapproved of the Acquisition, or determined if this announcement is accurate or complete. Any representation to the contrary is a criminal offence in the US.

US Greene King Shareholders and Greene King ADR Holders also should be aware that the transaction contemplated herein may have tax consequences in the US and, that such consequences, if any, are not described herein. US Greene King Shareholders and Greene King ADR Holders are urged to consult with legal, tax and financial advisers in connection with making a decision regarding this transaction.

Forward looking statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition, and other information published by CK Bidco and Greene King contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of CK Bidco and Greene King about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.

The forward-looking statements contained in this announcement include statements relating to the expected effects of the Acquisition on CK Bidco and Greene King (including their future prospects, developments and strategies), the expected timing and scope of the Acquisition and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "projects", "strategy", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although CK Bidco and Greene King believe that the expectations reflected in such forward-looking statements are reasonable, CK Bidco and Greene King can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to complete the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms and schedule; as future market conditions, changes in general economic and business conditions, the behaviour of other market participants, the anticipated benefits from the proposed transaction not being realised as a result of changes in general economic and market conditions in the countries in which CK Bidco and Greene King operate, weak, volatile or illiquid capital and/or credit markets, changes in tax rates, interest rate and currency value fluctuations, the degree of competition in the geographic and business areas in which CK Bidco and Greene King operate and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither CK Bidco nor Greene King, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place any reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations, neither CK Bidco nor Greene King is under any obligation, and CK Bidco and Greene King expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on a website

This announcement and the documents required to be published pursuant to Rule 26.1 of the Takeover Code will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on CKA's website at https://webfilter.ckah.com/WF06/ and on Greene King's website at https://www.greeneking.co.uk/investor-centre/ promptly and in any event by no later than 12 noon (London time) on the Business Day following the  publication of this announcement.  The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

No profit forecasts, estimates or quantified benefits statements

Nothing in this announcement is intended, or is to be construed, as a profit forecast, profit estimate or quantified benefits statement for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for Greene King for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Greene King.

Requesting hard copy documents

In accordance with Rule 30.3 of the Takeover Code, Greene King Shareholders, persons with information rights and participants in the Greene King Share Plans may request a hard copy of this announcement by contacting Greene King's registrars, Link Asset Services, during business hours on 0871 664 0300 (or +44(0) 371 664 0300 from abroad) or at The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU. For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. Such persons may also request that all future documents, announcements and information to be sent to you in relation to the Acquisition should be in hard copy form.

Electronic Communications

Please be aware that addresses, electronic addresses and certain other information provided by Greene King Shareholders, persons with information rights and other relevant persons for the receipt of communications from Greene King may be provided to CK Bidco during the offer period as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c).

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.

Rule 2.9 of the Takeover Code

For the purposes of Rule 2.9 of the Takeover Code, Greene King confirms that, as at 16 August 2019, it had in issue 310,011,031 ordinary shares of 12.5 pence each. The ISIN for the shares is GB00B0HZP136.

Greene King has in place the Greene King ADR programme sponsored and administered by Deutsche Bank Trust Company Americas. One Greene King ADR represents two Greene King Shares. The Greene King ADRs are traded over-the-counter. The ISIN for the Greene King ADRs is US3947022030.