Regent makes a hostile move on the Newts

JOHN SHEPHERD

The title of the book The Death of the English Pub proved more accurate than the author would have liked yesterday, as Regent Inns launched a hostile pounds 6.8m takeover bid for his chain of 13 watering holes that trade under the Newt & Cucumber banner.

Christopher Hutt, who became the second chairman of the successful Campaign for Real Ale pressure group in 1973, did not sound as pleased as a newt yesterday over the bid for the pubs he runs through a company called Unicorn Inns.

He declined to answer questions over his mobile phone as he scurried around the City in search of a fresh team of advisers to help him judge the merits of the bid. Greig Middleton, the stockbroking firm, has stopped acting for Unicorn because it also acts for Regent.

Analysts think that the chances of Unicorn Inns remaining independent are slim, in particular because of the make-up of the shareholding structure. Management only owns 24 per cent, including Mr Hutt's10 per cent stake, while Norwich Union has 27 per cent and the rest of the share register comprises individuals who backed the company's launch nine years ago under the Business Expansion Scheme.

Senior management at Regent have acquired a strong following in the City in the two years since it floated. Regent is headed by David Franks, a descendant of the Franks family that helped to establish the Chef & Brewer pub chain in 1901.

Talks have been held, but Mr Hutt did not warm to Regent's acquisitive aspirations because he wanted to elevate the company's shares from the matched-bargain 4.2 market to the recently launched Alternative Investment Market.

A successful purchase of Unicorn would widen the geographical spread of Regent. Only six of the company's 53 pubs are sited outside the ring of the M25 motorway. Newt & Cucumbers can be found as far west as Swansea, as far east as Norwich, in the Midlands and in Slough just outside London.

Mr Franks believes Unicorn's attempts to expand will be constrained by its pounds 2m of debts, and that Newt & Cucumber would benefit from Regent's greater buying power. Regent's operating profit margin is 20.5 per cent, against Unicorn's 12.6 per cent. Unicorn made pounds 434,000 of profits before tax in the year to 26 March, and paid an inaugural dividend of 1p per share.