Punch pulls flotation

Punch Taverns, the parent group of Punch Pub Company, has pulled its flotation on the London Stock Exchange - just hours before shares were due to be priced.

The 4,300-strong company had been due to start trading today (May 16) and it is now thought it could float at a later date.

A statement from the company said: "Punch Taverns announces that it will not proceed with its proposed offering of ordinary shares. Punch Taverns has made this decision on the basis of the recent conditions in the equity markets."

A spokesman for Merrill Lynch, the company co-ordinating the share issue, said: "Although the offer was covered in the range with quality investors, we have taken the view that in the current environment it was unlikely to perform well in the immediate aftermarket."

Punch had planned to price its shares between 250p and 300p, which would have meant its equity would be valued somewhere £620m and £744m.

The disappointing market debut of music retailer HMV and questions over Punch's capacity for growth had led to doubts about the company's flotation and some industry observers had speculated the company would be valued at an amount nearer £620m rather than the hoped-for £744m.

Punch was the main target of a damning article in the Financial Times just 24 hours before its planned flotation. The article was highly critical of the tenanted tied-lease model and said in extreme cases customers of Wetherspoons pubs paid less for beer than a licensee does from its pub company.

Sentiment for the stock is thought to have changed in the 24 hours after the article appeared and industry figures attacked the Financial Times' timing.

Enterprise Inns chief executive Ted Tuppen said: "The timing and the content of this article was bias and irresponsible, and does the reputation of the Financial Times no good whatsoever."

Punch, which bought the 46-strong White Rose estate last week, owns 4,295 outlets and is the UK's second biggest pub company.

The company had pre-tax profits of £202m on £370m turnover in the year to August 18, 2001.

Related stories:​

Pubcos hit back at FT-Punch story (15 May 2002)

Punch buys £15m White Rose (10 May 2002)

Punch Taverns' flotation draws closer (30 April 2002)

Punch announces intention to float (15 April 2002)

Revealed: new identity for Punch Retail (8 February 2002)

Punch to float in March (16 January 2002)

Punch Group intends to float despite turbulent market (28 Septemeber 2001)

Punch Retail prepares for flotation with new chairman (24 August 2001)