Predators eye Greenalls pubs

GREENALLS HAS embarked on a radical strategic review since its profits warning last week, with a sale of its underperforming pubs chain and wholesale operations top of the list of options.

Nomura and Whitbread have both been mooted as possible buyers of its 790 managed pubs, leaving Greenalls free to concentrate on its successful four-star De Vere hotel chain.

Although Greenalls said over the weekend that it had nothing to add to its announcement last week, insiders freely admit that the company's problems stem from having overpaid for Boddingtons three years ago.

This means that however much Greenalls invests in its pub operations, it is still finding it difficult to make them pay, according to analysts. If it did sell its pubs and restaurants chain, it could raise up to pounds 1.2bn, analysts suggest. The company only has a market capital of around pounds 900m, according to Friday's closing share price of 343p.

Coming so soon after the sale of Allied Domecq's sale of its pub chain to Punch Taverns, Greenall's announcement that annual results would be "materially below market expectations" sent corporate financiers hurrying to construct a new deal. Whitbread's bid for the Allied pubs was sunk by the Office of Fair Trading, and it is now thought to be running a slide rule over the Greenalls pubs. A spokesman for Whitbread said yesterday: "This is complete and utter journalistic speculation. We have no comment to make."

Nomura also declined to comment on rumours its key deal maker, Guy Hands, is considering an offer. A week ago Nomura linked with Alchemy Partners, the venture capital business, to make a late and unsuccessful foray into the Allied talks. It is understood, however, Mr Hands is preoccupied with looking at several large privatisation deals in Germany.

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