Punch Taverns buys Mill House Inns for £164m

Punch Taverns has bought managed pub company Mill House Inns for £164m in an off-market deal.

The 82-strong estate, which is located throughout South East England and the Midlands, will be integrated into the Spirit portfolio under one or more of the Value Food, Premium Food and Quality Local concepts. It is understood that up to 30 of the outlets could switch to the flagship Chef & Brewer brand.

The pubs, whose trade split is approximately 41 per cent food, 59 per cent liquor, are situated off-High Street in edge of town or semi-rural locations. Ninety per cent of the estate is freehold or long leasehold.

Mill House underwent a management buyout in 2005, which led to a revamping of the group's then-strategy and the sale of non-core gastropubs and other sites. At July 2006 its pubs were averaging £198,000 EBITDA.

Punch said it expected the deal to generate cost savings from purchasing benefits and other areas.

Chief executive Giles Thorley said: "Mill House is one of the best food-led pub businesses in the market and complements our existing estate, providing scope for synergy benefits and returns from the outset."

Punch is meanwhile set to rollout the third and final phase of its Spirit pub conversion programme "within a matter of days".

The pubco is set to publish details of forthcoming 'retailer roadshows' and viewing days for around 360 of its currently managed Spirit outlets in the next week or two.

It has already released nearly 500 of the 1,800-plus Spirit pubs it acquired at the beginning of this year with a view to converting them over to leased businesses.

Brands up for grabs including John Barras, 2 For 1 and Mr Q's.