Tup Inns looks at Tom Hoskins deal

Bar chain Tup Inns is considering expansion out of its London homeland through a merger or takeover — and Leicestershire brewer Tom Hoskins has come into its sights.

The group was this week due to open its 10th outlet, the Balham Tup, in South London, and is on course to open another five this year.

It comes less than a month after its ninth opened in Camden, North London, following a year of consolidation.

Expansion has been put into the hands of new acquisitions director Clive Watson, who was previously finance director at pub operator Regent Inns.

Watson has now built up a personal stake of 7.1 per cent in Tom Hoskins, which could be developed into a takeover or merger for Tup Inns.

"We are in the market to pick up one-off sites of more than 3,000sq ft in areas where we feel there are enough would-be customers for the Tup badge," Watson said.

"But in a personal capacity and as part of Tup Inns, I am always looking for potential corporate situations."

He said merging with a company already listed on the Stock Exchange would provide it with a cost-effective means of floating through the back door.

Tup Inns chief executive Hugh Corbett considered floating last year but, like other operators, was put off by the weakness of the sector in the market.

Tom Hoskins has been listed on the Stock Exchange's Alternative Investment Market for smaller companies since 1996.

Based in Northampton, it operates a brewery in Leicester and 21 managed pubs from the Cotswolds to East Anglia.

It has been selling its town centre sites to focus on larger, traditional food-led pubs, in contrast to Tup Inns which operates themed pubs aimed at 20 to 35-year-olds, which also have a strong food offering.

Watson said: "Joining with someone like Tom Hoskins would give Tup Inns economies of scale and improve our coverage."

Tom Hoskins was hit badly last year by the poor weather in the Midlands and issued a warning that annual profits to the end of February would be "substantially lower" than the previous year's £165,000.

In January it secured £9.5m in a new debt facility with the Bank of Scotland to support plans to grow its estate from 18 to as much as 60 within two years.

It has also raised cash by selling sites, investing the cash in pubs both in its core trading area and further afield.