Investors awash with pub flotations

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The Independent Online
WILLIAM GLADSTONE moaned of being "borne down in a torrent of gin and beer" after losing the 1874 general election, and a deluge of similar proportions now threatens to engulf investors in a pub retailing sector awash with at least half a dozen companies looking to go public.

"It's a bit like the baby boom in the Sixties," quips Derek Mapp, managing director of Tom Cobleigh, the independent pub retailer planning a pounds 50m flotation next month. "But we weren't conceived out of the Beer Orders."

The Government's so-called Beer Orders in 1989 forced the big brewers to sell off thousands of pubs - inevitably, they chose the least profitable. Unlike other flotation candidates, though, Mansfield-based Tom Cobleigh owns none of the boozers spun off by the industry giants after that fateful Monopolies and Mergers Commission review. Instead, in a little over three years, Cobleigh has built up a chain of 78 mostly managed, branded pubs in Yorkshire, Humberside and the east Midlands.

While Cobleigh should receive a warm reception from investors, the same cannot be said of Enterprise Inns, a management buyout from Bass in 1991, which is due to price its expected pounds 60m issue this week. Analysts worried by the quality of its 500 outlets say Enterprise may have to be floated on a yield of up to 6 per cent to get the issue safely away.

Other pub chains - including Century Inns, Magic Pub and the biggest of them all, the Brent Walker-owned Pubmaster - may have to reconsider their own float plans if Enterprise fails to generate enough interest.