Enterprise, Punch vie for pubs

BATTLELINES were formally drawn today in the fast-track £2.2bn auction for Nomura's 4,300-strong pubs estate as Enterprise Inns lined itself up against privately-owned Punch Taverns.

Enterprise outlined plans to table an offer as part of a consortium of venture capitalists, led by Cinven and Legal & General Ventures. The pubs operator would take a minority stake in the business but hold an option to buy the estate in two years.

The statement calmed fears among some investors that Enterprise was planning a rights issue to fund the deal. Due to its high debt levels, Enterprise is likely to put up to only £100m into the transaction. Nomura's securitised Unique and unsecuritised Voyager estates would be put into a new company and be run separately from the core Enterprise business.

The auction will be complex and carried out at breakneck speed, as Nomura's adviser Schroder Salomon Smith Barney has imposed a 20 March deadline, reportedly the cut-off point for Nomura's exiting top former financier Guy Hands to get his £50m bonus.

While the headline value of the transaction has been put at £2.2bn, about £1.5bn of that will be made up of debt. A buyer will either continue the securitisation of the Unique estate or resecuritise Unique and Voyager.

With around 20,000 British pubs being owned by venture capitalists expected to seek disposals soon, Nomura is not in a strong negotiating position.

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