Rank buys Cobleigh in pounds 96m deal

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The Independent Online
Another fortune was made in the booming eating-out market yesterday after Rank paid pounds 95.6m for Tom Cobleigh, a chain of 44 managed pubs that was started from scratch only four years ago. Derek Mapp, Cobleigh's managing director who chipped in pounds 170,000 in 1991 to acquire the group's first pub, stands to pocket pounds 6.4m from the deal.

The other main beneficiary of the sale is European Acquisition Capital, a venture capital group that invests mainly for pension funds, which has transformed its original pounds 10m investment into pounds 47.5m. EAC put the group into play earlier this summer when it indicated it wanted an exit, either through a placing or trade sale.

Mr Mapp said he was happy with the sale to Rank, which has allowed him and three other founder directors to realise their investment while remaining with the company to achieve their ambition of building Tom Cobleigh, which trades under the motto "Unspolit Pubs for Nice People", into a national brand.

Neither the founders, who have committed to stay with Rank for three years, nor EAC sold any shares on flotation less than a year ago when Cobleigh raised pounds 22m via a placing of shares at 150p. Rank's takeover, which is understood to have beaten a rival offer from Yates Wine Lodges, was pitched yesterday at 240p.

Andrew Teare, new chief executive at Rank, said the acquisition was in line with his recently stated strategy of concentrating on the group's leisure retailing activities while withdrawing from its long standing investment in the Xerox office machines business. He denied the deal meant Rank was poised to make a string of pub acquisitions.

He said Rank would accelerate Tom Cobleigh's already ambitious opening programme which had envisaged 16 new openings this year. A similar level of new pub openings is planned for the next two years "leaving us with 80 plus units and an extended geographic profile".

Rank had considered setting up its own branded outlets, Mr Teare said, but buying Cobleigh had given it a five-year headstart. Rank's shares closed 7.5p lower at 431.5p as the market focused on the price being paid for the company, which represented 27 times forecast earnings for the year to next March.

The acquisition is the latest in a run of fully-priced recent purchases of small entrepreneurial pub companies.