Honeycombe Leisure hoists For Sale sign.
Honeycombe Leisure, the north-west operator of managed pubs, has hoisted a for-sale sign after a strategic review.
The company, which has 115 pubs, has appointed Rothschild to conduct an auction after the review concluded this was the best way to maximise value for shareholders.
The auction comes after takeover talks with a mystery suitor, believed to be Trust Inns owner Trevor Hemmings, collapsed a few weeks ago.
The strategic review has involved a formal revaluation of the estate by Graham & Sibbald Chartered Surveyors, which has conclude its now worth £36.5m, a decline of £1.24m (or 3.7%) in the April 2003 value. The vast majority of the decline - £865,000 of it - relates to the leasehold element of the estate.
Two leasehold sites have seen particular drops in value - Bar Suede, Carlisle, where a significant move in the circuit has badly affected trade, and the Golden Lion, Ashton, where new competition has reduced profitability.
Other leasehold sites have fallen in value simply because the leases have 3 years less to run than when they were last valued.
Honeycombe¹s existing bank facilities with the Bank of Scotland, which are repayable on demand, are due for renewal in July 2006.
The company reported that the Bank of Scotland remains supportive of the business and the intended auction process. In a statement, Honeycombe added: "There can be no certainty that this process will lead to an offer being made for the Company. A further announcement will be made in due course."
