Exclusive: Novus set to buy Balls Brothers

Novus Leisure, the privately-owned bar and club group led by Steve Richards, is understood to be in exclusive negotiations to buy Balls Brothers, the London wine bar business currently in administration.

Although a deal is not expected to be sealed for some weeks, a successful conclusion to talks would see Novus add 19 bars - located predominantly in the City of London - to its current business, which comprises 37 large-scale venues, primarily located in London's West End and the City.

The sale is being handled by Zolfo Cooper, the corporate advisory firm that was appointed as administrator before Christmas.

The move to call in administrators was made by Balls Brothers's lead bank, Barclays, after mounting losses at the firm.

Novus, which also operates the Tiger Tiger business, has emerged as the preferred bidder after a process that media speculation suggests saw around 100 expressions of interest from various would-be buyers.

Sources close to Novus confirmed that the company was in talks to acquire the business and said a deal would be in line with its ambition to expand in its London heartland.

Novus expects to add significant footfall and volume to the business by bringing its central sales and booking system to bear: as well as a sales team that sell space at each venue - particularly to corporate customers - the group also has over one million customers on its database and a consumer-facing website called latenightlondon.co.uk.

Recent accounts filed by Novus show the business produced operating profits of about £6m on sales of about £90m in its most recent year.

Balls Brothers is currently run by Chris Sullivan, an industry veteran who specialises in turnaround situations.

In addition to its traditional basement wine bar format, the company operates a handful of eateries plus some bar-restaurants acquired through its purchase of the Lewis & Clarke business in 2006.

Following the appointment as administrator in November, Nick Cropper of Zolfo Cooper, said: "The Balls Brothers business has been an established name for over 50 years and is extremely well known across the London leisure and dining sector.

"The company has a great heritage and enjoys a lasting reputation due to its high standards in service, food and wine, and is sure to generate significant interest."