Pub firm Punch proposes M&B merger

• IBTimes RSS
• Print
• E-Mail
• digg
• Del.icio.us

Under the offer both sets of shareholders would own 50 percent of the combined company with M&B shareholders also receiving 175 million pounds in cash.

The proposal would create Britain's biggest pub landlord by far with a total value of 11 billion pounds once the debt of both firms is included.

Punch's Chief Executive Giles Thorley would head the proposed new 10,500 pub group, its Finance Director Phil Dutton would remain as finance chief, and M&B's CEO Tim Clarke would be made non-executive chairman.

M&B, which effectively put itself up for sale last week after capping post-tax, hedge-related losses on a failed property spin off at 274 million pounds, said it was considering the approach along with others.

M&B shares rose 4.4 percent in opening trading while Punch shares were 1.5 percent better off.

Analysts said the deal made sense financially but could face a big hurdle in the shape of out of pocket M&B shareholders.

"This is 1) confirmation of a long standing suggestion, 2) pretty sensible, 3) deliverable and quick but 4) does not offer what M&B's shareholders most want - namely a profitable exit." said BlueOar analyst Mark Brumby.

At least 60 percent of M&B shareholders bought into the stock in the last year in the hope of cashing in on the property spin off, Tim Clarke told reporters last week.

They are likely to be looking at big losses having seen M&B shares lose around half their value in the last 7 months as the firm's property hopes died.

• 1
• 2