R2O back on the prowl

Despite being rebuffed by Mitchells & Butlers (M&B) last week Robert Tchenguiz's R20 is determined to secure a sizeable pub deal in the near future.

The group is in the second round of bidding for the 290 pubs being sold by Punch Taverns and says it is still in the market to "buy big".

R20 tabled a formal 550p - a share cash offer for M&B - valuing the All Bar One operator at around £4.5bn including debt - four days before the deadline of May 8.

However, it was summarily rejected by M&B's board the following day and R20 conceded defeat. The company does maintain it reserves the right to make an offer in the next six months should the M&B board change its mind and decide to accept such an offer, or if a third party makes a move for the managed pub group.

Ian Payne, chairman of the Laurel Pub Company and the executive most closely associated with the effort to secure M&B, mounted a robust defence of R20's tactics and brushed aside any suggestion the group fell at the final hurdle over the deal.

"We put in a written offer for 550p a share, which valued M&B at £4.5bn including debt. M&B's shares only rose to around £5 following our interest," he said.

"This was an extremely good offer," he added.

Mr Payne admitted he and his colleagues had been "very upset by the rejection" of R20's proposal, but the fact the offer was lined up should be seen as a "huge positive for Laurel and R20", given that it could raise the sort of funds that valued a company like M&B at such a level.

The size of the offer illustrated that he and his colleagues were serious about securing a large pub estate and this strategy would continue in the future.

"The M&B situation was frustrating, but it's now in the past," said Mr Payne.

"We're now focusing on the 290-odd pubs that Punch Taverns has put up for sale and we're delighted to be in the second round [the deadline for which is May 23."

M&B acknowledged R20's withdrawal from the race to acquire it, and said its board "believes the company has excellent prospects for organic growth and is well placed to take advantage of consolidation opportunities," which analysts take to mean the 250-plus non-core pubs Whitbread has announced are up for grabs.