Capital Pub Co to tap shareholders for acquisition cash

Capital Pub Company hopes to boost its chances of snapping up more pubs in the near future by raising millions of pounds via a rights issue.

The London-based pub operator, whose shares were trading today at 103.5p, has announced it will host a special meeting for shareholders at the end of this month where it will seek approval to issue 5, 571,000 new shares.

In a statement the group said it "regularly identified earnings-enhancing acquisition opportunities", namely it was always on the lookout to increase the size of its estate, currently running at 26 pubs.

Capital said it would normally seek authority from shareholders to issue new stock at its next annual general meeting in September.

"However, there are some earnings-enhancing opportunities that the directors are keen to pursue in the short term," it said.

"In order to give the company the optimum financial flexibility to take advantage of these potential acquisitions, the company is seeking shareholder approval to increase the number of shares that it is able to issue for cash otherwise than pro rata​ to existing shareholders."

In other words, it wants to take advantage of what it sees as a relatively benign stock market to tap shareholders for around £5.5m.

The group has made no secret of wanting to buy more pubs in the capital for some time, but has found itself priced out of several choice deals by the likes of fellow London operator Fuller's.

With some companies, notably Punch Taverns, looking to sell off decent performing assets to fund debt repayments Capital clearly sees now as being as good a time as any to go to its shareholders for the necessary cash.