Punch Taverns walks away from M&B merger

Punch Taverns has withdrawn its offer to merge with pub operator Mitchells & Butlers (M&B) after it admitted that its offer was too generous and no longer in the best interests of its shareholders.

Punch Taverns, led by Giles Thorley, said it had withdrawn its merger offer to M&B placed 2 months ago. It consisted of a 50-50 merger plus £175 million to M&B shareholders. However, since then, share prices in both companies have fallen, with shares in M&B sinking faster.

M&B, owners of the All Bar One chain, have become vulnerable to take-over offers after losing £274 million through a collapsed property deal.

Following the smoking ban implemented last summer, other pub operators are struggling. Just last week, Robert Tchenguiz, property entrepreneur put his Laurel Pub Company into administration after failing to find buyers. Laurel’s 460 sites include a mixture of Yates’s, Hog Head, Litten Tree and Bar Med, Slug and Lettuce and La Tasca.

Furthermore, Admiral Taverns, the UK’s third-largest tenanted pub operator, last week announced it was putting its expansion on hold while the economy remains unstable.

Finally, Enterprise Inns, which runs 7,000 pubs said the smoking ban was having a ‘particularly adverse impact‘ on its pubs that don’t serve food. However, the group said it was confident that the smoke-free atmosphere would attract new customers.

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