Marston's slumps as Platinum walks away

Marston’s shares slid on Thursday after Platinum said it will not be making a firm offer for the pub group.

In a very brief statement, the US private equity firm said that "after careful consideration, it does not intend to submit a revised proposal and it will not make a firm offer for Marston's".

The news weighed on Marston’s shares, which at 0930 GMT were trading down 12.3% at 87.13p.

Marston’s rejected offers of 88p a share and 95p a share in December, and a third offer of 105p at the end of January.

The pub chain said: "The board continues to believes that Marston’s is well placed to benefit from the opportunities in a post Covid-19 trading environment, following the completion of the SA Brain transaction and harnessing factors such as a reduction in on-trade industry supply, and increased home-working that will benefit pubs in suburban locations."

Marston’s highlighted its "strengthened" balance sheet following the creation of its joint venture with Carlsberg and "significant" cash headroom, which it said would enable the group to continue to absorb the impact of Covid restrictions.

"We welcome the continued nationwide rollout of the vaccine programme and look forward to rebuilding trading momentum once restrictions are lifted," it said.

Broker Liberum noted that Marston’s shares have risen around 33% and its pub coverage has risen 17% since Platinum’s interest was made public on 29 January. "Although we expect there may be some weakness in share prices today, they should be fairly well underpinned as these levels with NAV of 87p rising to over 120p in the coming years," it said.

"However, private equity and M&A interest in the market should continue to support valuations and share price progression in the coming months with our pub coverage still c17% below pre-Covid levels."