Punch Taverns tight-lipped over pub 'firesale'

Punch Taverns was remaining tight-lipped this week as speculation grew that it was looking to sell off a number of its best performing pubs in order to help to pay down its multi-billion pound debt.

While neither the pubco nor Sapient Corporate Finance - the financial specialist reported to have been handed the task of selling the pubs - were prepared to comment, it was widely believed that Punch had offered or was in the process of offering dozens of its top quality sites to a range of potential buyers.

With bank lending at an all-time low and with a number of groups in possession of available cash, observers believe Punch wants to take advantage of the current market conditions.

"Bank borrowing is an issue, but there are still people with cash who want to buy pubs," said one City analyst last week, citing the example of Adnams, which recently bought three sites from Punch.

And it wasn't just Punch that was selling, the analyst added.

"We've seen twice the proceeds from disposals that we were forecasting two years ago," he said.

One of the country's largest property agents echoed the view that deals were being done at attractive prices.

Brian Sheldon, a director at Christie + Co, said: "Well-established, good quality businesses are still attracting considerable interest.

"The curtailing of expansion plans by national operators which are looking to curtail capital expenditure and cut debts makes this a perfect time for local operators with good track records to take advantage of attractive opportunities that currently exist in the marketplace."

However, Punch's move attracted criticism from some industry quarters.

"They are selling what are effectively their crown jewels at a knockdown price," said one well-placed observer, who did not want to be named.

"Selling landmark sites is fine if they get a good price. The danger is they will be left with a fairly dull estate," he added.