Enterprise Inns was today poised to reclaim its position as the UK’s largest pubs group by buying the Unique Pub Company for £609m.
The West Midlands-based group will nearly double its estate to 9,143 pubs if the deal for the remaining 83.2% stake in Unique nets shareholder approval.
The move will make Enterprise the largest UK pubs group, eclipsing Punch Taverns which took the lead after its takeover of Pubmaster in November.
Enterprise, which bought a 16.8% stake in Unique in March 2002, said it would exercise an option to buy the remaining shares from a private equity consortium led by Cinven.
It currently operates around 5,080 pubs after expanding through a series of acquisitions, including the Laurel pubs in 2002.
Enterprise will now add another 4,050 unbranded sites from Unique, although between 200 and 300 pubs are likely to be offloaded to meet regulatory concerns.
Chief executive Ted Tuppen said the deal, which is due to be completed by the end of March, would mark the end of its acquisitions programme.
He said: “We find ourselves now with an estate which has got to an almost optimal size.
“We will now be concentrating on the quality of the estate – investing and churning.”
Cinven, which specialises in buyouts in the European market from offices in London, Paris and Frankfurt, said it would reap a return of two times its invested capital on the deal.
It has made previous investments in the pub sector, buying Magic Pubs in 1994 before selling it to Greene King in 1996 for £213.7m.
The deal was announced as Enterprise said strong festive sales had put it on course to post pre-tax profits and operating profits in line with market hopes.
Chairman Hubert Reid told shareholders at the annual meeting: “Trading in our pubs was buoyant over the Christmas and New Year holiday period, evidenced by strong sales both in the run up to Christmas and during the January re-stocking period.”
Shares in Enterprise, which posted a 51% increase in pre-tax profits for the year to 30 September to £173.2m, gained 4% following the announcement.
References: EGi News 22/01/04
