Greenalls sells off pubs to Nomura

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The Independent Online
GREENALLS WILL this week sell off 1,400 pubs to Nomura, the Japanese bank and Britain's biggest pub landlord, writes Diane Coyle.

The pounds 375m deal for the sale of the tenanted or franchised Inn Partnership is due to be announced on Wednesday with Greenall's results for the year to September.

Inn Partnership had sales of pounds 111m in the year to September 1997, and made operating profits of pounds 38.9m.

The price tag is somewhat below the informal pounds 400m-plus initially sought by Greenalls in October, reflecting concernsabout a slowdown in business.

Other potential buyers had included Charterhouse Development Capital and Greene King. But despite the interest, some analysts were concerned that it would not easily find a buyer.

The disposal will nearly wipe out Greenall's borrowings, allowing it to increase investment in its De Vere hotels and Village Leisure health and fitness chain. It is the latest in a series of disposals taking the group away from its brewing past towards a broader series of leisure businesses. It is also the latest in a series of consolidation deals in the pubs sector.

Guy Hands, managing director of Nomura's principal finance unit, earlier this year ruled out new investments. But last week, in a move designed to raise the profile of the businesses it now owns, Nomura announced the creation of its Unique Pub Company, a vehicle for earlier acquisitions.

This already has 2,600 tenanted pubs, expected to make an operating profit of more than pounds 80m this year. It is likely to be floated within two years and Giles Thorley, Unique's chief executive, said a valuation of more than pounds 1bn was expected.

It also has some 1,100 pubs outside this new division.