Marston’s plc to take over all 156 Brains’ pubs in Wales

In an announcement on Wednesday, Marston’s plc (LON: MARS) said it will take over all 156 Brains’ pubs in Wales. The deal, it added, will save 1,300 jobs amidst the ongoing Coronavirus pandemic that has pushed businesses into massive job cuts this year. As per the British company, it will operate the pubs under the same brand name (Brains).

Marston’s shares closed roughly 0.5% up on Wednesday. Including the price action, the pub operator now has a per-share price of 74.80 pence that translates to an over 40% decline year to date in the stock market.

In March, when the impact of the COVID-19 crisis was at its peak, the stock had tumbled to as low as 22.20 pence per share. The price action should come in handy if you are interested in investing in the stock market.

Marston’s didn’t disclose the financial terms of the deal

According to Marston’s:

“As a consequence of the challenges of COVID, and in particular the recently announced more stringent additional trading restrictions in Wales, Brains’ business has been under significant financial pressure.”

The 2^nd wave of the COVID-19 crisis made Prime Minister Boris Johnson’s government impose new countrywide restrictions in November that are particularly hitting pubs and restaurant operators in the United Kingdom.

Marston’s refrained from divulging financial terms of its agreement with Brains but expressed confidence that it will address the Welsh brewer’s funding requirements. In a bid to shore up finances amidst a hit to its sales due to the pandemic, Marston’s itself had expressed plans of cutting 2,150 furloughed jobs in October.

Marston’s published its quarterly report earlier in December

Earlier in December, the Wolverhampton-based company also urged the government that the sector was in need of more support. In its statement on Wednesday, Marston’s said that the transaction will result in an up to £2 million boost in costs.

The announcement comes only weeks after Marston’s said that its pre-tax loss in the recently concluded financial year broadened to £388.7 million as the ongoing COVID-19 crisis pushed the countrywide pubs and bars into temporarily shutting down. In comparison, Marston’s pre-tax loss in the previous fiscal year was capped at a significantly lower £44.7 million.

The London-listed company performed fairly upbeat in the stock market last year with an annual gain of more than 35%. At the time of writing, it is valued at £347.61 million.