LONDON – Shares in Punch Taverns are exploding on Wednesday as of 13.55 p.m. GMT (9.55 a.m. ET) after rumours circulated that Heineken is looking to takeover the massive UK chain, which owns 3,300 pub, were confirmed.

The share price initially jumped by over 22% after Sky News reported that Dutch brewer Heineken is in a “secret takeover battle for Punch Taverns … Bidding against Punch co-founder Alan McIntosh” before midday:

Now it shares are up over 40% after Punch Taverns released a statement confirming it was in the middle of takeover bids:

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Foto: source Google Finance

Sky News initially reported that Heineken, which makes the Strongbow and Foster's brands, has been embroiled in a secret takeover battle to take control over Punch Taverns and that it is in direct competition with one of the company's founders - Alan McIntosh.

The report added that McIntosh is allegedly working with advisers at the Bank of America Merrill Lynch.

Punch Taverns then released a statement, confirming takeover talks:

The Board of Punch (the "Board") notes the recent speculation regarding possible offers for Punch.

The Board confirms that it has received a proposal from Patron Capital Advisers LLP ("Patron") regarding a possible cash offer for Punch at 174 pence per Punch share (the "Patron Proposal"). As part of the Patron Proposal, Heineken N.V. ("Heineken") would acquire Punch A (one of two securitisation structures within the Punch group) from Patron immediately following completion of Patron's offer for Punch. The Patron Proposal is conditional on, amongst other things, the recommendation of the Board.

The Board is in advanced discussions with Patron and Heineken regarding the Patron Proposal.

The Board also confirms that it has also received an approach from Emerald Investment Partners Limited ("Emerald") regarding a possible cash offer for Punch at 185 pence per Punch share (the "Emerald Proposal"). The Emerald Proposal is conditional on, amongst other things, arranging committed financing, confirmatory due diligence, and the recommendation of the Board.

The Board is in discussions with Emerald regarding the Emerald Proposal. As required by Rule 2.6(a) of the Code, Patron and Emerald are required, by not later than 5.00 p.m. on 11 January 2017, to either announce a firm intention to make an offer for Punch in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline may be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.

There can be no certainty that any firm offer will be made by either Patron or Emerald. A further announcement will be made in due course.

This statement is being made by Punch without the prior agreement or approval of Patron, Heineken and Emerald.