City Diary — 28 January

Give Lewis some credit​

Activist Mitchells & Butlers shareholder Joe Lewis features in a fascinating new book by Armann Thorvaldsson, the head of Icelandic Kauphing Bank's UK operation. The book, Frozen Assets: How I lived Iceland's boom and bust, recounts a meeting between Lewis and Thorvaldsson on Lewis's super-yacht in St Tropez in early June 2007, just before the start of the credit crunch in early August of the same year. Lewis told Thorvaldsson that he was holding nearly all his assets in cash in the belief that a liquidity crunch was due.

Lewis told him: "I don't know when or how, I just know from experience that the time will come that liquidity will dry up, it always does." As it turned out, Lewis was a winner and a loser in the credit crunch.

In March 2008, he lost nearly £1bn building a stake in Bear Sterns, but in October 2008 bought Robert Tchenguiz's 22% stake in M&B, financed by Kaupthing, for a knock-down price as Kaupthing was caught in the Icelandic banking meltdown.

It's the wonder of Wetherspoon's​

Is Woolworths going to provide a rich seam of new site pickings for JD Wetherspoon? After our tale last week it emerges that the Spoons has run the rule over quite a few of Woolies now defunct stores, including a branch in the town centre of Waterlooville, just outside Portsmouth in Hampshire. The company is tight-lipped, and the competition from budget retailers prepared to pay premiums, strong. But sources indicate that in addition to picking up "kit" from the likes of 3DE, a handful of its planned 50 openings will be former Woolies. Watch this space as they say.

Punch gives Sapient busy year​

Pub sector mergers and acquisitions specialist Sapient Corporate Finance had a pretty good 2009 courtesy of Punch Taverns. Sapient, headed by Peter Hansen and Fraser Anderson, completed no fewer than 14 different transactions (43 managed pubs, 55 tenanted sites) on behalf of Punch, raising £139m. Buyers of Punch pubs were Charles Wells, Cubitt House, Frederic Robinson, Fuller's, Geonimo, Greene King, JD Wetherspoon,

JW Lees, McMullens, Realpubs, Shepherd Neame and St Austell. Over the past five years Sapient has advised on more than 30 pub sector transactions with a total value of £2.5bn.

Food for fags in vending plan​

A south Wales licensee has a cunning plan to save pub cigarette vending machines made redundant by a ban coming into force next year. From 2011 pubs will no longer be allowed to sell cigarettes from the traditional machines to make them less accessible to anyone under 18.

But Caerphilly-based snacks supplier Salysol GB has come up with an ingenious way to use the machines — by selling food products in cigarette packet-sized containers. Paul Beales, director of Salysol GB, and also host of the Butchers Arms in Rhiwbina, Cardiff, said the new snack range had been developed to help pubs avoid the cost of conversion. He said: "It means that all people will have to do is change the front panel of the machine."

RPI — really painful increase​

Enterprise Inn has lined up eight pubs for an Allsops auction on 10 February. The company is offering a 35-year lease with five-year rent reviews, but no annual RPI rent uplifts to freehold buyers. One sub-tenant, whose pub is on the block at the auction, tells City Diary: "Enterprise is pushing itself a bit — I wouldn't want anything to go wrong here. Mind you, we are paying RPI rent increases so it's income from the pub will increase over the five years."

Former M&B man joins Punch​

All change at Punch Taverns. City Diary hears a former senior Mitchells & Butlers executive has joined Punch Taverns. Kieran Rabbitt has replaced Phil Sermon as regional operations director for the west region. He has a wealth of experience having headed up a number of key M&B brands including Toby Carvery, Vintage Inns, Harvester and Crown Carveries (M&B). His most recent job was heading up M&B's Sizzling Pub Company brand, which he left to go travelling.

Down le hatch and dans la till​

The foray by Charles Wells into France via its John Bull Pub Company venture is going rather well. It has five outlets over there with plans to expand to 13 by 2013, taking advantage of low French property prices. It seems the French have discovered a taste for our ale — two-thirds of weekly turnover is from beer rather than wine. Oh, and Charles Wells is earning a very handy E3m a year from its French operation.

Maschler's verdict awaited​

Justin Carter has just unveiled Wallace & Co, his new English cafe-meets-deli-meets-bar-meets-grocers, in partnership with Masterchef host Gregg Wallace. The Elbow Room founder hopes to open between five and eight Wallaces in five years. Everything is going well says Carter, although "we could have done without the Evening Standard restaurant critic Fay Maschler coming in on our second night of trading." Fingers crossed for the review.

Crunch sees administrators coining it​

Rich pickings for administrators out there in 2009 — with plenty more to come this year. City Diary hears that the banks are hovering over a number of well-known businesses at the smaller end of the scale, poised to hit the administration button. It's lucrative work. Zolfo Cooper, for example, reported that it has charged £132,465 working on the administration of Suburban Style Bars — representing 631 hours at an average rate of £220 per hour. Senior partners — experience at partner level — charge themselves out at £425 per hour, which works out a very reasonable £3,400 per day. Even more reasonable at the bottom of the scale are support staff, who cost a mere £75 per hour.