Better late than never as Punch moves up

Punch Taverns, the parent group of the 4,300-strong pub company, enjoyed a successful debut on the London Stock Exchange yesterday.

Last week the company pulled its planned flotation, before announcing it would list at a lowered price of 230p, just seven days later.

Yesterday, the first day of limited trading, saw the shares close up at 242p, giving the company a value just shy of £600m and providing a much needed fillip to the new issues market.

But the price was still some way short of the 250-300p price range, at which Merrill Lynch, the company's advisers, were intially hoping to place the shares.

It was the failure to win enough institutional support in that range following the disappointing float of music retailer HMV that led to Punch pulling the float in the first place.

A Punch spokesman said the company was very pleased with the first day's trading. None of its main pre-float investors, such as Texas Pacific, had sold out.

Punch raised £160m from the float, some of which will be used to pay down loan notes. Around £56m will be left to use as working capital and to fund acquisitions.

The business is expected to make a significant acquisition in the next year. It was recently linked to privately-owned Pubmaster, the 3,200 tenanted pub company led by John Sands. It is thought that any large deal would see Punch return to the market to raise the necessary cash.

Related stories:​

Punch Taverns float resurfaces (21 May 2002)

Punch pulls flotation (16 May 2002)

Pubcos hit back at FT-Punch story (15 May 2002)

Punch Taverns' flotation draws closer (30 April 2002)

Punch announces intention to float (15 April 2002)

Punch to float in March (16 January 2002)