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Punch makes £3bn bid for Spirit
Punch Taverns has made an unsolicited bid for the Spirit Group which could value the rival pub operator at around £3bn.
Giles Thorley, chief executive of Punch – which operates a portfolio of 7,800 leased and tenanted pubs across the UK – is understood to have approached Spirit earlier this month.
Spirit – which runs more than 2000 pubs – is owned by investment bank Merrill Lynch and private equity firms Blackstone, Texas Pacific Group and CVC Capital.
Merrill Lynch is believed to be exploring the offer, codenamed Project Redwood, and talks are said to be in the preliminary stages.
Should Punch acquire Spirit, it is thought that the company might convert about 1,200 of the managed pubs to tenanted operations and then sell the remaining 800 outlets to another competitor, such as Mitchells & Butlers or Whitbread.
The acquisition would transform Punch into Britain’s biggest pub group – overtaking Enterprise Inns, which runs 8,600 pubs – and reunite the managed and tenanted pubs of the original Punch Group, which was demerged in 2002.
A spokesperson for Spirit stressed that an offer was not inevitable and that the group was under no pressure from its shareholders to enter into any form of sale.
Recent reports that Mitchells & Butler, which runs brands including Browns, Scream and All Bar One, is to make a counterbid for the entire Spirit estate were said to be broad speculation.
In 2004, Spirit completed a £2.1bn refinancing deal as well as two sale and leaseback deals worth £675m in total.
In July last year, the group also sold the Premier Lodge chain of 141 budget hotels to Whitbread for £536m.
Leisure Opportunities reported in April that Spirit was in separate discussions to sell around 170 bars and pubs, including the Bar 38 and Via Fossa chains, for £200m. Spirit would not confirm any progress with this deal. Details: www.thespiritgroup.com
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