M&B Punch Talks Resume

By Claire Miller

- Last updated on GMT

Related tags: Punch taverns, Private equity, Public house

Mitchells and Butlers have said they are once again in talks with Punch Taverns, this time over the possible acquisition of the managed pubs division, Spirit

MITCHELLS & Butlers (M&B) has announced it is in talks with Punch Taverns to buy the group’s managed pub division, Spirit.

To fund the purchase, M&B, which has a market capitalisation of £1.3bn, is looking to sell just under a 30 per cent stake to one of a few buyers rumoured to be interested.

The purchase would reportedly net Punch Taverns several hundred million pounds, and would be a successful turnaround after talks between the two groups earlier this year failed to come to an agreement on a 50-50 merger.

Three private equity groups, Bain Capital, Permina and a CVC/Blackstone combination, are said to be interested in the 29.9 per cent stake Mitchells and Butler are offering. M&B have reported resilient sales growth, robust operating profits performance and strong operational cash generation, and will open its books to the potential bidders this week.

In a statement M&B said: “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.

“The board has now initiated an approach to Punch to explore whether terms for such a mutually beneficial transaction can be agreed.”

M&B currently operate around 2,000 pubs in the UK, Spirit, which Punch bought in 2006 for £2.7b, has about 800 pubs.

Related topics: Business


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