Punch hangs 'for sale' sign over 380 Spirit pubs

Britain's largest pubs group, Punch Taverns, hoisted a for-sale sign yesterday over 380 pubs, which are expected to fetch up to £650m.

The company has spent the past five months working out which pubs it wants to keep from the 1,830-strong Spirit estate acquired in December. The sale is likely to include the Old Orleans and Bar Room Bar chains. Punch is converting 740 pubs into leased outlets but has unexpectedly decided 680 pubs, including the Chef & Brewer chain, should stay managed.

Some analysts are worried the group may be shifting from its strategy of owning tenanted pubs, run by individuals who lease the property, towards a mix of tenanted and managed pubs, which are centrally operated by the company.

Citigroup, which was recently appointed joint broker to Punch, said: "The wording of the statement suggests the investment case has changed from a tenanted pure play to a dual managed/tenanted estate for the time being."

Punch's chief executive, Giles Thorley, dismissed concerns, reiterating the group's raison d'être was to be the "largest high-quality leased pub operator in the UK". He added: "We also have one of the highest-quality managed businesses in the UK, but it is going to be a very small proportion of our overall business." But he also noted other pubs groups had been very successful with a twin strategy.

The sale is expected to attract plenty of interest, with the rivals Mitchells & Butlers, Wolverhampton & Dudley and Greene King likely to take a look. The property tycoon Robert Tchenguiz, who lost out in the bidding for Spirit and recently abandoned a takeover approach to M&B, is also thought to be interested.

Punch posted a 13 per cent rise in pre-tax profits to £116m in the 28 weeks to 4 March, with turnover up 53 per cent to £619m, boosted by the Spirit acquisition. Mr Thorley played down the prospect of a big boost from the World Cup. "It won't make a huge difference. The overall effect on the full year is not very big." But he said things could be different if England reach the later stages, when "the feel-good factor rubs off even on those who hate football".