Pub chain Mitchells & Butlers (M&B) confirmed on Monday it is in talks with Punch Taverns to acquire its 869 Spirit-managed pubs. The pub group also said that three private equity firms are studying the acquisition of a minority stake in the company. The investors are Permira, Bain Capital and a joint venture of Blackstone Group and CVC Capital Partners, according to the Financial Times.
Pub chain Mitchells & Butlers (M&B) confirmed on Monday it is in talks with Punch Taverns to acquire its 869 Spirit-managed pubs. The pub group also said that three private equity firms are studying the acquisition of a minority stake in the company. The investors are Permira, Bain Capital and a joint venture of Blackstone Group and CVC Capital Partners, according to the Financial Times.
'The board believes that significant value through enhanced sales and profitability can be created by integrating Punch's managed pub business into Mitchells & Butlers' operational and brand structure,' M&B said. 'The board has now initiated an approach to Punch to explore whether terms for such a mutually beneficial transaction can be agreed.'
The group said the purchase of Punch's £1.5bn pub business could be funded with the help of private equity firms. 'All the discussions are at a preliminary stage and subject to further due diligence and negotiation. There can therefore be no certainty that any transaction will be concluded,' it added.
M&B's plan to acquire Punch's Spirit business follows a strategic business review announced in January after the company lost almost £400mln on an aborted £4.5 bn property deal with Robert Tchenguiz, its 24% shareholder. First agreed in May, the joint venture with Tchenguiz fell through in the wake of the credit crunch and worsened conditions in the debt market. Last month Punch approached M&B with regard to a possible merger, but it eventually pulled out of the deal.
Mitchells & Butlers owns and operates around 2,000 high quality pubs.
