Punch says Spirit sale is 'no solution' to M&B's ills
Talks on takeover of managed division end in acrimony
M&B issues coded rebuke to Punch for failure to explore potential Spirit sale
The discussions between Punch and Mitchells & Butlers (M&B) over a deal of some kind have ended in acrimony. Punch has ended talks started by M&B over buying Spirit, its managed division.
A spokesman for Punch said: "Spirit is not available either as a solution to
M&B's difficulties nor to
the detriment of our shareholders' best interests". Punch has ruled itself out of a move on M&B for six months, subject to a number of caveats, including the departure of chief excutive Tim Clarke.
Meanwhile, M&B issued a coded rebuke to Punch for not exploring properly the possibility of a sale of its Spirit managed division.
The company has said it regretted "that Punch has rejected the opportunity to discuss a mutually-beneficial transaction".
The comment is a clear suggestion that M&B feels Punch had not engaged in exploring the deal fully. A source close to the situation said: "There have been initial discussions, but these discussions didn't really get beyond that.
"I don't think you could say Punch has really heard what M&B had to say over this. There were some vocal Punch shareholders who were quite supportive of this."
Punch had been exploring the option of joining forces with a private equity player to take a stake in M&B. These discussions have also been ended because they would not further the interests of its shareholders.
Some observers thought that Punch might be open to selling Spirit on the basis that it would allow it to follow the possible path of Enterprise Inns in converting to a tax-efficient real estate investment trust (Reit) more easily.
Punch's determination not to sell Spirit at the moment was underlined by reports that the company had also rebuffed a preliminary approach by smaller managed company Orchid.
