Pebble Hotels to bid for Merchant Inns pubs
Industry sources indicate that Pebble Hotels, the company chaired by former Mill House Inns boss Ted Kennedy, has tabled a bid for Merchant Inns.
Pebble Hotels currently runs three hotels and four of the six Merchant Inns sites offer a total of 130 bedrooms.
A source told the Morning Advertiser: "Merchant Inns has been in administration for an inordinate amount of time and there are several bidders getting impatient to hear a response to their offers."
It is thought that Merchant founder Sir John Ritblat, the former chairman of British Land, has also tabled an offer that would involve Merchant's bank rolling their debt forward.
Merchant went into administration in October.
More than 300 trade creditors are owned nearly £1.2m and the taxman a further £1m while unsecured creditors, owed £12m, will get nothing.
Merchant Inns' bank Coutts, owned by Royal Bank of Scotland, is owed £14m.
Reports have suggested that the Royal Bank of Scotland (RBS) may elect to appoint its own management despite other bids.
Robert Breare, the former executive chairman of Merchant Inns who left after a row with Ritblat, is also understood to be a bidder for the business.
Administrators Deloitte, who were bought in following the discovery of "unknown" financial liabilities, appointed Colliers Robert Barry to find buyers.
Orchid deal
RBS concluded a complex deal in December for Orchid Group to run Premium Bars & Restaurants on its behalf.
It is thought that deal could in time see Orchid take full control of the group — if RBS's debt position can be recovered.
The bank may pursue a similar strategy with Merchant.
A second source said: "The Merchant Inns sites are not making any money but Merchant's founder Robert Breare doesn't get enough credit for his vision which is second-to-none. These are good sites but in need of better management."
Breare and Ritblat teamed up in October 2007 to set up Merchant. They formed Kamside, an investment vehicle, to purchase the five-strong portfolio for about £20m, including £10m of debt, later adding a sixth site.
The strategy at Merchant Inns was to purchase pubs that could be developed into food-led propositions with a significant rooms business plus conferencing and events facilities too.
One of its properties — the Horse & Groom Inn near Malmesbury in the Cotswolds — recently featured in the top five of the Morning Advertiser's list of best pubs in the country.
Merchant's other properties are: the Lambert Arms in Watlington (Oxfordshire); the Talbot Inn in Ripley (Surrey); the Carnarvon Arms, Newbury (Berkshire); the Black Boy Inn, Banbury (Oxon).
