LONDON - Mitchells & Butlers (M&B) and Punch Taverns, two of Britain's biggest pub groups are reportedly hammering out an agreement to bid jointly for rival Spirit Group. A £2.5 billion bid is expected to be put on the table for Sprint.
M&B, owner of the All Bar One and Harvester chains has tuned to Citigroup to advise it on this deal, while Morgan Stanley are the advisers for Punch. The company was said to be considering bidding for Sprint all alone in June and it was reported that Punch had even attended a presentation at Merrill Lynch, Spirit’s adviser in this deal.
However, that particular deal fell through and now Punch has joined hands with M&B to work as a team. Tim Clarke and Giles Thorley, chief executives of the two companies are said to be in regular contact and are keen to see this through. Insiders say that the City might be forced to intervene and ask the companies about their intentions because of competition concerns.
The Sunday Times reports that all is not smooth though. The two companies are unaware as to how much amount has been taken out of Sprint by Spirit’s shareholders, Texas Pacific, Blackstone, CVC and Merrill Lynch. And since a securitised bond covers about half of the estate, M&B and Punch are unsure as to exactly what amount to bid for.
If the deal does come through, Punch would dip into a lion's share of Sprint's pubs and convert them into tenanted houses. M&B is reported to be interested in 500 sites and would want to control brands like Chef & Brewer. But analysts say that the two companies could look to form partnerships with other bidders if the current talks fail to materialize into a constructive deal.
Posted
on : Sun, 11 Sep 2005 17:05 GMT | Business News
By : Mike Lawson
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