London Town swoops for portfolio of pubs in £95m deal
Property development group London Town has bought 167 pubs from entrepreneur Jack Petchy in a £94.57m deal, which heralds its newly awakened appetite for acquisitions in the sector.
The Alternative Investment Market listed group, which is currently searching for a chief executive, has borrowed £72.82m from Anglo Irish Bank for the deal.
The company, which paid £5.4m for 14 West Country pubs in April of this year, said it had been impressed with their performance since and is keen to enlarge its pub portfolio.
In the eight months to 31 August the 167-strong pub portfolio had annualised income of around £6.5m.
London Town plans to run all the leased and tenanted sites in the portfolio as going concerns initially, but will look to convert 62 of the pubs to alternative use when opportunities arise.
The pubs will continue to be run by County Estate Management.
Petchy will gain a 22.2% share in London Town as part of the transaction through Incorporated Holdings, which is a parent company of seller Petchy Holdings.
Horizon Trust, an independent charitable trust associated with the interests of Lord Ashcroft will hold 53.8% of the stock. Robar Limited, an investment vehicle for the Richardson Brothers, will have a 22.2% share in the restructured business.
The deal is subject to shareholder approval at an Extraordinary General Meeting on 21 December.
By Chris Druce
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