Morgan Grenfell looks for aggressive returns in secret portfolio disposal
Adam Coffer
The former Whitbread pub estate is at the centre of a secret £320m-plus bidding war.
London & Regional Properties is believed to lead the race for the sale and leaseback of 50% of the estate of the Laurel Pub Company, the fourth-largest managed pub operator in the country.
Laurel is considering proposals from 10 bidders for half of the 626 bars and pubs, which include the Hogshead, Casa, RSVP and Shotz brands as well as a number of unbranded properties.
Ian and Richard Livingstone’s L&R is said to be the frontrunner for the deal, in partnership with Nomura, but it refused to comment.
Sources said Rotch, Topland and a Royal Bank of Scotland-backed investor had also offered bids of between £280m and more than £320m, yielding 7%.
Most of the estate is now owned freehold by Laurel, which was formed in May 2001 out of the sale of Whitbread pubs to Morgan Grenfell Private Equity for £1.63bn.
Over the last year Laurel has disposed of over 2,300 predominantly leased pubs in two separate deals with Enterprise Inns netting £1.14bn. The remaining portfolio has undergone a £20m refurbishment programme. Laurel is understood to be offering a leaseback of around 20 years.
Donaldsons is advising the pub group but also refused to disclose any details. One insider close to negotiations said: “The process has been extraordinarily secretive, even by corporate finance standards.
“Morgan Grenfell demands aggressive returns and sees this as the best time to release cash from property it does not need to own for its core business.”
A spokeswoman for the company said: “Laurel Pub Company is considering a number of refinancing options including sale and leaseback.
“We have been approached by a number of interested parties who have put forward a range of attractive bids that reflect the high quality of the managed pub estate.
“We are now considering these offers; however, we are not discounting alternative options.”
