Private equity firms bidding for Admiral

A report on Sky News​ yesterday (Wednesday 12 July) revealed that Patron Capital, which has agreed to acquire 1,300 Punch pubs, is among the suitors for the pubco.

However, MCA​ understands the process is several weeks away from selecting a final bidder and that the £200m figure quoted by Sky​ understates the current value of the business, based on the property valuation by Colliers of £243m as reported in the group’s 2016 accounts.

MCA​ understands that Admiral received approaches following Patron and Heineken’s joint bid for Punch at the end of last year.

The process, which would see Cerberus exit the business but would involve the same Kevin Georgel-led management team, is geared towards giving the group the firepower to make further acquisitions.

Admiral is understood to be emboldened by the successful integration of the 111 pubs it acquired from Heineken in 2014 and feels it now has a strong core of pubs following a series of disposals and can capitalise on the acquisition opportunities in the market.

During the year to 28 May 2016 turnover at the group rose 1.7% to £69.5m. Underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) for the period was up 1.3% to £25.2m, with underlying EBITDA per pub up 4.1%.

The pubs acquired from Heineken generated double digit EBITDA growth in the second half of the financial year (immediately following the first anniversary of Admiral’s ownership).

Cerberus acquired the then 1,100-strong Admiral from Lloyds Banking Group at the beginning of 2013.

Sapient Corporate Finance is understood to be handling the process.