Greene King buys 8 pubs from Punch
Greene King has acquired eight pubs from Punch Taverns for a total of £15.9m.
Greene King: deal should complete by 16 February
The freehold pubs are located around the country, including one in central London and one in Scotland.
The deal is expected to be completed on 16 February with Punch using the proceeds to reduce debt and reinvest in its estate.
The eight pubs generated earnings before interest and tax of £1m for the financial year to 22 August 2009. The book value of the pubs was £12.8m.
It follows on from the sale of 11 managed pubs to Greene King in July last year. The Suffolk brewer said it was using funds raised from its £207.5m rights issue last year.
"After their full integration into Greene King, we expect to return these pubs to normalised, historic trading levels which, when supported by operational synergies, will equate to c.9x EBITDA, in line with the financial criteria of the rights issue," said Greene King.
"The intrinsic quality and location of these pubs, combined with the historic yield they have generated, would support a value in excess of £16m for these assets.
"Following this acquisition, we have now invested £79m of the rights issue proceeds, in acquiring 26 high quality, freehold, managed pubs and repurchasing below par debt."
Greene King also said today that the health of its tenants was improving thanks to increased levels of support (Greene King: pub tenants health improving).
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