Punch agrees sale of Matthew Clark stake to Conviviality

A dividend of £1.5m will be paid by Matthew Clark to Punch prior to completion of the deal, which is expected to be by 2 October 2015.

Following completion, Punch will enter into a 10 year non-exclusive drinks supply contract with Matthew Clark for Matthew Clark to supply selected wines and spirits drinks products at agreed pricing levels.

Duncan Garrood, chief executive of Punch Taverns plc, said: “We are pleased to have agreed the disposal of our investment in Matthew Clark and at a significant premium to our current book value. The sale of a non-core business will enhance our financial flexibility to pursue our strategic objectives for our core activities.

"At the same time, we will enter into a 10 year drinks supply agreement with Matthew Clark for the supply of wines and spirits into the Punch estate.”

The Matthew Clark business is a 50/50 joint venture between the group and Hertford Cellars Limited, a subsidiary of Accolade Wines Limited. As part of the same transaction, Hertford Cellars Limited will sell its 50% shareholding in Matthew Clark to Conviviality Brands.

The unaudited value of the investment on the Group’s balance sheet as at 22 August 2015 was £52.3 million (FY14 audited: £50.5 million). The unaudited share of post-tax profit attributable to the Group’s 50% shareholding in Matthew Clark for the financial year ended 22 August 2015 was £7.8 million (FY14 audited: £6.2 million).

Punch said the net cash proceeds of the disposal, after transaction costs and expenses, amount to approximately £98.7m.

The sale will enhance the Punch’s financial flexibility to pursue its strategic objectives.