Patron completes £1.8bn deal to buy 3,200 Punch pubs
The “complex” deal will be completed in two parts. Patron has bought the 3,200 Punch pubs which are financed through two business securitisations, termed Punch A and Punch B.
Patron will retain the group of pubs known as Punch B, which has about £550m gross debt secured against 1,300 pubs, in addition to cash resources held across the group.
It will own and run the 1,300 pubs in Punch B as well as owning the Punch Holding Group. A spokesperson for Patron told The Morning Advertiser that it would continue to be “business as usual” for the pubs in this group.
The investment firm can now move ahead with finalising the sale of the group of 1,900 pubs known as Punch A, which has around £770m in gross debt secured against it, to Heineken in a £305m deal. The Punch A part of the deal is worth an enterprise value of around £1.2bn, Patron said.
Patron said that the equity value of the whole Punch deal, for all 3,200 pubs is around £402m, which “implies an enterprise value of around £1.8bn”.
A spokesperson for Patron said that the seemingly disproportionate enterprise value for Punch A (£1.2bn) and Punch B (£0.6bn) is the result of distinct financing for each securitisation.
A spokeswoman for Patron said: "It is important to remember that Patron is not just buying Punch B. It has bought Punch plc, which contains more than just Punch B. The plc has certain assets and liabilities outside of the securitisation, including for example about 50 pubs, all the employees, and the head office and other associated costs and liabilities."
Under a transitional agreement with Heineken, Patron said it would continue to operate the 1,900 Punch A pubs for a further six months.
Patron Capital managing director Keith Breslauer said: "Completing this complex deal paves the way for an exciting future for Punch as a more focused business. This is a company that has undergone a number of challenges and distractions in recent years, but has a portfolio of high-quality pubs with excellent future potential.”
He said the firm was committed to continued investment in the pubs, adding: “Punch’s pubs and publicans will have our full support to deal with changing market dynamics and provide their customers with the best possible offer.”
Punch chief executive Duncan Garrood said: “This has been a long road and we are delighted that we are now able to move forward with clarity. I am proud of the professionalism of the Punch employees during this period of uncertainty, and remain sure of their ongoing commitment as we look to an exciting future under new ownership.”
