Fortress Investment Group has taken a £1bn bet on the resilience of the British boozer, by buying Punch Pubs from Patron Capital Partners.
The acquisition of Punch’s 1,300 sites, for an undisclosed sum, was financed entirely by equity provided by funds managed by Fortress affiliates, with no additional debt being taken on.
The deal represents something of a consolation prize for the SoftBank-owned investment firm after its defeat by Clayton, Dubilier & Rice in the £7bn auction of the Morrisons supermarket chain. But like Morrisons, Punch is a shrewd property play, as it owns more than 90% of its freeholds.
Punch was bought by Patron and May Capital four years ago, when it was a 3,200-pub giant. As part of the deal, 1,900 of them were pre-sold to Heineken.
Analysts said it was inevitable that Fortress would seek to step up the pace of expansion at Punch, with one suggesting that Admiral, co-owned by the Magners cider-maker C&C Group, could become a target. The purchase of Hawthorn has lifted its estate to more than 1,600 pubs.
Others touted Marston’s and Greene King as possible targets, with one analyst adding: “The ink is barely dry on the deal and already there is speculation on who Punch might buy next.”
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