Deal to find new pub operator for Merchant Inns close

Royal Bank of Scotland (RBS) is thought to be close to appointing a pub group to operate Merchant Inns, the business set up by Robert Breare and Sir John Ritblat that was placed in administration late last year.​

RBS is drawing up a shortlist of potential operators after inviting first round bids for a three-year management contract. It is thought that an agreed proposal will include some form of option to buy the business outright at the end of the contract.

More than 10 companies are believed to have expressed an interest in taking on Merchant in a process handled by CBRE, the property specialist. The next stage of bidding will see a handful of companies taken further in negotiations before RBS selects its preferred partner.

The business, which comprises six sites, currently sits in RBS’s West Register subsidiary – a special division set up to house distressed businesses that the bank thinks it should retain because of the possibility of some form of value recovery.

Interested groups​

Interested groups are said to include “all the usual suspects” like Greene King and Marston’s. It is thought that Pebble Hotels, the fledgling hotel group set up by Ted Kennedy, is also one of the bidders.

Administrators at Deloitte were appointed to Merchant in October last year​ amid talk of financial irregularities – and after a major falling out between Ritblat and Breare. 

Mark Stretton is editor of BigHospitality's sister title M&C Report.​​