Punch Taverns sells more pubs to Greene King

In the latest disposal from Punch Taverns, Greene King has agreed to buy four managed pubs from the UK's largest pubco for £5.3m.

Two the four freehold food-led sites are in Aberdeen, while the other pair are located south of the border in Northampton and Nottingham.

Punch, which announced the deal today, said proceeds from the sale would be used to "reduce debt and reinvest in the estate"

It said the agreement was unconditional and expected it to complete on July 8, 2010.

Punch has sold 23 pubs to the Suffolk brewer in the past year for a total sum of £51.6m.

The group said the 23 pubs had a net book value of £52.7m as at the end of its last financial year - August 22, 2009 - and had generated earnings before interest and tax of £4.75m in the same period.

Greene King said in the year to August 2009, the four newly-acquired sites had generated EBITDA of £342,000.

"We expect, following targeted capital investment and operational synergies from integration into Greene King, that these sites will return to more normalised, historic trading levels, equating to around seven times EBITDA," it added.

The brewer said it had now invested £100m of last year's £205m-plus rights issue proceeds, acquiring 34 freehold pubs and buying back debt.

Rooney Anand, the brewer's chief executive, said: "We are very pleased to have acquired these sites. They are freehold retail sites in great locations currently trading below their potential.

"We expect to convert the sites into our market-leading pub restaurant brands, Hungry Horse and Eating Inn, further strengthening our position in the UK eating out market".