Cinven, the private equity group, is set to double its money from the Unique Pub Company, the tenanted chain bought from Nomura International by a consortium two years ago for £2bn.
Cinven's profit is set to crystallise in the next two months when Enterpise Inns exercises an option to acquire the rest of Unique from its private equity backers.
At its annual meeting yesterday, Enterprise repeated its intention to use its option to buy Unique. Hubert Reid, the company's chairman, said it would take control of the pub group before the end of March.
The transaction will make Enterprise by far the country's biggest pub company but will mark the end of its rapid acquisition programme focussing on big deals. This has seen it expand from a few hundred pubs when it floated in 1995 to a total of 9,143 as a result of the Unique deal.
Cinven invested just under £200m in the original deal to buy Unique and will exit with about £400m. Its private equity partners, Legal & General Ventures and Morgan Stanley, together invested a further £300m and will receive back a total of £600m.
Enterprise itself took a 16.8 per cent stake in Unique at the time of the acquisition and will now be buying the outstanding 83.2 per cent from Cinven and its consortium partners thanks to the option it negotiated in March 2002.
Enterprise will spend £609m in exercising its option which will be funded entirely by debt. Ted Tuppen, the Enterprise chief executive, will now focus on improving the quality of the estate by buying and selling smaller packages of pubs to continue generating growth.
Mr Tuppen said: "There are not many large pub estates that would significantly enhance the quality of our own. The future is much more about quality rather than quantity. I envisage an estate of between 8,000 and 10,000 pubs of ever increasing quality."Reuse content