Germans buy £800m round

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The Independent Online

Bridgepoint Capital, the private equity group once owned by NatWest, is poised to sell its stake in Pubmaster, the privately owned pub group with a 2,000-strong estate.

Bridgepoint Capital, the private equity group once owned by NatWest, is poised to sell its stake in Pubmaster, the privately owned pub group with a 2,000-strong estate.

WestLB, the German bank, is this weekend finalising the purchase in a £800m deal, including debt and equity. An announcement is expected this week. Pubmaster's other backers are PPM Ventures, part of Prudential, and BC Partners.

Hartlepool-based Pubmaster is a vestige of the Brent Walker empire that disappeared with its William Hill betting shop chain's sale in 1997.

Bridgepoint, or NatWest Ventures as it was then, was part of a consortium that in 1996 paid £171m for the failed leisure group's 1,600 outlets. Brent Walker had acquired them eight years earlier from Grand Metropolitan, now part of drinks group Diageo.

NatWest Ventures kept the original management, led by John Brackenbury and John Sands, who remain in charge to this day.

Pubmaster has since embarked on an expansion that included last year's £127.5m acquisition of the Swallow estate, funded by a securitisation that let Pubmaster borrow against the future income of its pubs.

Bridgepoint has chosen to exit by a sale after its original plan to float Pubmaster was shelved, largely due to the stock market's growing aversion to mature industries of this type.

Bridgepoint's exit comes as many traditional British pub owners are heading for the door. Whitbread last month announced plans to dispose of its estate, following the example of Allied Domecq that last year sold out to a private buyer, Punch Taverns. Bass, too, is expected to call time at some point in the next 12 months.

Under its new owner, Pubmaster may bid for Whitbread's 3,000-strong estate. Its ambitions are also thought to lie in the direction of the 900 pubs Bass has already put up for sale, as well as Wolverhampton & Dudley's portfolio. Other likely bidders for some or all of Whitbread's estate are Alchemy and Nomura.

Bridgepoint, that manages about £1.8bn, has several other high-profile investments including Andrew Lloyd-Webber's Really Useful theatre company, and the Golden Wonder MBO.

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