Punch Taverns has bought 12 managed pubs from Honeycombe Leisure for £11.7m.

Punch will lease the properties back to Honeycombe under a hybrid tied lease arrangement. Giles Thorley, chief executive of Punch said: 'We have admired the quality of Honeycombe's operation for some time and have been discussing with them ways of developing a mutually beneficial relationship.

'This transaction brings together the finance and capital capability of Punch with the retailing skills of Honeycombe. We see this as a template for similar deals in the future.'

For the year ended 28 April 2002, the sites generated earnings before interest, tax and depreciation of £1.67m. James Baer, chief executive of Honeycombe said: 'This transaction represents a significant milestone in Honeycombe's strategic development.

'Not only does the transaction reduce substantially Honeycombe's bank borrowings, but, more importantly, it also establishes a relationship with Punch Taverns, the UK's second largest pub owner, and provides a potential template for future deals by which Honeycombe can grow its estate without the need to raise further equity or take on additional debt.'

The deal takes the total number of pubs in Punch's estate to 4490.