Outlook: Scottish/Greenalls

WHO'S MANAGED to get the better end of Scottish & Newcastle's widely leaked pounds 1.1bn acquisition of Greenalls 821 pubs, restaurants, and budget hotels? Is it the galloping Lord, Peter Daresbury, who as an amateur jockey has won almost as many National Hunt trophies as his company owned pubs? Or is it Brian Stewart, S&N's genial chief executive?

It is a characteristic of such transactions that both parties will magnanimously claim the deal is good for both of them. Rarely is this the case, still less does anyone believe it to be so. Maybe, just maybe, this is one such rare occasion.

Quite a few in the City think S&N is overpaying. One of its competitors, who for obvious reasons wishes to remain anonymous, describes the price as "simply bonkers". At nearly pounds 1.4m per outlet, it might seem hard to disagree.

However, for Scottish & Newcastle the transaction is essentially an asset swop, and provided it can obtain an equally full price for the 600 pubs it must now sell under the beer orders - the purpose of which most of us struggle to recall - it will both give the group a better geographic spread as well as fulfilling its strategy of moving towards a predominantly managed pub estate. The deal should quite quickly prove earnings enhancing.

As for Greenalls, it completes the company's painful passage from family- controlled regional brewer, to independently managed provincial hotels group. Whether it will long be allowed to remain so is anyone's guess.

Many believe that by selling the pubs, Lord Daresbury has merely dressed up his company for takeover. Still smarting from its failure to acquire Allied Domecq's pubs, Whitbread appears to be performing another 180 degree turn back to its original strategy of expanding in hotels. Greenalls' De Vere Hotels chain looks just the ticket.