Enterprise Inns, the tenanted pubs group, raised £50m in a surprise share placing yesterday as part of the financing for its planned £609m acquisition of the Unique Pub Company.
The group has also renegotiated its banking covenants as part of an exercise to preserve its "stable" credit rating from Moody's, the credit rating agency, which put the company under review in January.
To avoid any possibility of a downgrade by Moody's, Enterprise, led by Ted Tuppen, the chief executive, decided to issue new shares to raise the £50m, about 2.3 per cent of the company's capital, and fine tune its banking covenants. The market reacted positively to the share issue, the company's shares rising 12p or nearly 2 per cent to 640p yesterday.
Enterprise will issue details to shareholders later this month of its plans to buy Unique, where it already has a 16.8 per cent stake. The remainder is owned by a consortium of private equity groups who financed the purchase of Unique from Nomura. Enterprise had planned to finance the entire deal to take control of Unique with debt but changed its mind to guarantee its credit rating.
Mr Tuppen said: "We had a series of discussions with Moody's after it put us on review and we decided to slightly restructure our financing. Because of our commitment to our bondholders and our commitment to maintain our credit rating, we saw fit to raise £50m of equity."
The deal to buy Unique will add 4,200 pubs to the Enterprise estate, giving it more than 9,000 outlets. Its business model works on rent collection and selling beer to tenants.Reuse content