Punch Taverns' pub sale 'window' set to close

Punch Taverns is set to close the 'window of opportunity' that has enabled hundreds of its lessees to lodge successful bids for their pubs, the group said yesterday.

Around 400 lessees are in the final stages of negotiating the acquisition of their pub, according to Neil Griffiths, Punch's property director.

Griffiths said that these licensees currently in 'legals' with the pubco over their respective acquisitions would be required to complete or at least exchange contracts by the end of August.

Those lessees whose offer had initially been accepted would have until the end of September to complete their acquisition, he added.

Griffiths was unable to say how much cash was being raised by the 400-strong sale, but overall disposal proceeds in the 40 weeks to May 30, 2009, had amounted to £171m.

Some 311 of the group's pubs had been sold so far, he added.

Griffiths said he was "delighted" that even in the current economic climate so many of the group's licensees had managed to find the necessary financing to fund the purchase of their pub.

Faced with criticism that some lessees are having what they believe to be realistic bids rejected by the pubco, Griffiths said there would be instances were there could be no agreement on price.

"I can't say how many people bid low and whose bid we rejected. The value [of a pub] to our shareholders may not be how our partners view it.

"Yes, there will have been people who have been disappointed regarding the valuation 'gap', but these will be a lot fewer than those where we have agreed deals," he added.

Banks had been cautious, Griffiths said, as had some valuers: "Prospective purchasers have to satisfy the banks' criteria for lending, and for some raising funds has been an issue."

By closing the window of opportunity for its licensees to buy their pub, which it opened earlier this year, Punch was signalling an end to what some critics have termed a 'firesale' by the company in order to raise cash to pay down debt.

Last month the group said it had paid off £404m of its gross debt at a cost of £258m.

Griffiths said Punch had received 90 per cent of its enquiries from partners during the first three weeks of the offer, "demonstrating a strong level of immediate interest. This is another reason why we've decided to bring the offer window to a close".

However, Punch would always consider approaches to acquire any of its pubs, he added.