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News Article Comments : Enterprise targets £200m at pub auctions
Enterprise Inns could raise as much as £200m by selling the freeholds of 100 pubs at public auctions, if a trial this month is successful.
The company is trialing the sale of seven freeholds at an Allsops auction on 15 October, hoping to raise £14.7m.
The company is offering private investors a 35-year lease with itself as tenant on the head-lease, subject to a five-yearly rent review and no indexation.
Chief executive Ted Tuppen said rents on offer to investors account for between 80 and 90% of each pub’s total Ebidta. “We’ve taken advice on the rent that’s appropriate,” he told City analysts.
Tuppen told the Morning Advertiser that the auction had already seen a great deal of interest from private individuals, who are not earning much interest on their money in the bank and who would be receiving a yield of 6% on their investment in buying an Enterprise freehold.
Enterprise Inns would be receiving a sale price of 14 to 15 times Ebitda if pubs sell for their guide price.
| Author Name | Opinion | Reply |
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info man 29/09/2009 12:52:42  |
RE: Enterprise targets £200m at pub auctions "Enterprise Inns would be receiving a sale price of 14 to 15 times Ebitda if pubs sell for their guide price. " Somebody get RICS in the dock to explain how this has been allowed to happen. Given that pubcos operate at 8-12 times Ebitda (which is approximately twice freehold value alledgedly) this figure of 15 times would mean that the pubs are being priced 3 times over the free market freehold value. To put it more simply, if it all went to pot the value of the pubs could drop to a third of their so called pubco book value. Where does that leave the new freeholder? A rent with no RPI increases? Whats good for the goose is not good for the gander. Enterprise's publicans will supposidly still be charged extra in wet rent and rpi year on year yet the new freeholder sees none of it. The publican still gets overrented and the businesses fail. The knock on affect is that the freehold value goes into freefall. What does the freeholder get in return? 6% when at the same time Enterprise will be making twice this amount and have cash in the bank. History has shown that this will not work out. edited by: info man at: 29/09/2009 12:55:43 This post replies to this thread |
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| J Mark Dodds 29/09/2009 14:55:43 |
RE: Enterprise targets £200m at pub auctions Bean Counter Economics: 'We always make money out of nowt'. This post replies to this thread |
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WhiskeyGalore 29/09/2009 17:22:18 |
Enterprise targets £200m at pub auctions It's either going to be a line of fools waiting to part with their cash or Starship with no takers and a line of folk stood laughing. I think Teddy should go on Dragons Den with this idea, maybe they can make sense of it. This post replies to this thread |
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james cooke 29/09/2009 23:05:55 |
Enterprise targets £200m at pub auctions Surely if the properties are worth 2 million each they should be going cocerns already why sell them.j.cooke This post replies to this thread |
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| info man 30/09/2009 12:32:41 |
Enterprise targets £200m at pub auctions 129.20 -4.40 (-3.29%) This post replies to this thread |
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| brian clarke 30/09/2009 12:36:45 |
Enterprise targets £200m at pub auctions INTERESTING NOTE PUT OUT BY MOODYS CONCERNING ENT AND PUNCH DEBT AND WHETHER THEY WILL BE ABLE TO REPAY AS INCOME CONTINUES TO FALL!!! This post replies to info man > Enterprise targets £200m at pub auctions |
