Nomura quaffs First Quench

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The Independent Online

Nomura, the Japanese investment bank, is close to becoming Britain's largest off-licence operator with the £220m acquisition of First Quench.

Nomura, the Japanese investment bank, is close to becoming Britain's largest off-licence operator with the £220m acquisition of First Quench.

Its Principal Finance arm is understood to have beaten a rival bid from PPM Ventures, the private equity arm of Prudential, in the race for a business which boasts the Thresher and Victoria Wine chains. The auction, which is being orchestrated by Close Brothers, the merchant bank, will create a profit for Whitbread and Punch Taverns, the joint owners of First Quench. The parties are spending this weekend thrashing out the final details of the deal.

The sale of First Quench, long signalled by its owners, has been delayed while the business was overhauled. Whitbread and Punch Taverns have worked together closely on the deal, putting aside last year's acrimonious battle for Allied Domecq's pub estate. Hugh Osmond, chairman of Punch, reacted furiously to the announcement last summer that Allied Domecq, now a specialised spirits company, had agreed to sell its estate to Whitbread. His long and vitriolic campaign against the deal ended last July in victory when Punch secured the 3,500 pubs for £2.75bn.

Both Whitbread and Punch have decided that off-licences are peripheral to their core business. Whitbread, which also owns pubs, restaurants, health clubs and hotels, is under City pressure to arrest its struggling share price by ending its historic association with its pubs division. Its shares have fallen by more than 25 per cent this year, depriving Whitbread of its place in the FT-SE 100 index of leading companies and prompting calls for its portfolio of businesses to be streamlined.

Punch, the privately owned pub group which is backed by Texas Pacific, the US venture capitalist, is eager to concentrate on absorbing Allied Domecq prior to a planned stock market flotation.

First Quench, which boasts 2,600 outlets, also features the Drinks Cabin and Wine Rack franchises. The price is lower than initial estimates of First Quench's value, which ranged as high as £300m, but reflects the company's internal problems and increasing competition it is facing from supermarkets.

A rival attempt to buy First Quench by a management team led by Jerry Walton, its former chief executive, has also fallen by the wayside.

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