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Nomura hops into top slot with Inntrepreneur buy

Nomura, the Japanese bank, yesterday became the largest indepenent pub operator in the UK with the pounds 1.2bn acquisition of Inntrepreneur and Spring Inns companies.
Grand Metropolitan and Australian Brewer, Foster's, have sold their 50 per cent stakes in Inntrepreneur, which has 2,900 pubs, to Nomura for pounds 950m. Nomura has also bought Spring Inns, the 1,410-strong pub chain which was split off from Inntrepreneur last year, for around pounds 225m.

Nomura, a securities house, plans to invest heavily in Inntrepreneur and will speed up the pub group's plans to create a managed pub estate.

Mike Foster, chief executive of Inntrepreneur, said: "Nomura obviously has deeper pockets. We can step up our plans to create a managed pub chain of a few hundred pubs." However Nomura is not likely to hold the group for the long term. It is likely to dispose of the group through a trade sale or flotation on the stock market after a few years.

The restructuring of Inntrepreneur could also lead to some management job losses but it is understood a large-scale redundancy programme is not on the cards at the moment.

However, Nomura has taken on a potential huge compensation claim from the pub groups' tenants who are looking to claim damages for allegedly being unfairly tied to beer supply agreements.

Under the deal all future litigation risks have been transferred from GrandMet and Foster's to Nomura.

The litigation worries intensified this summer when more than 800 pub tenants, or more than a third of Inntrepreneur's tenanted estate, failed to sign up to Retail Link, a new lease that commits them to buying beer from the group. Most of the tenants are thought to be determined to take legal action against Inntrepreneur over their existing leases which analysts believe could cost the group up to pounds 350m in damages.

More than 400 tenants of Spring Inns have also failed to sign up and could threaten further legal action.

One Inntrepreneur publican said yesterday: "We are determined to carry on fighting Inntrepreneur and await a decision by the European Commission on the legality of the beer agreements."

Mr Foster now believes Inntrepreneur will be able to secure a better deal from Scottish & Newcastle, the UK's largest brewer, when its beer supply agreement comes up for renewal next March and is planning to introduce several new beer suppliers.

GrandMet's sale of its 50 per cent stake in Inntrepreneur clears another obstacle in the way of its proposed pounds 23bn merger with Guinness. However the group said the sale, which will raise pounds 195m, would lead to a pounds 54m charge this year.

GrandMet also warned that the impact of the strong pound would cost it another pounds 22m in the second half on top of a pounds 9m currency hit in the first six months. But it denied the recent turmoil in Far Eastern currency markets would have a significant effect on profits.

GrandMet said the decision to exit its Burger King operations in France would cost another pounds 20m.