Greene King in exclusive talks for Laurel pubs

Greene King has confirmed it is in exclusive negotiations for the 430-strong neighbourhood package of pubs from the Laurel Pub Company.

According to a report in The Times​, Greene King is expected to pay £660m for the sites.

The Suffolk brewer, which already owns almost 1,700 pubs, is expected to fund the deal through a mixture of debt and equity.It is expected that the group will convert some of the smaller sites to tenancy.

The brewer's shares were higher in early trading as investors reacted positively to the news that the group would not be issuing new equity to fund the possible purchase.

However, there was some concern about the deal. According to Arbuthnot analyst Alan Millar, £660m for the estate is "higher than originally envisaged."

The 430 Laurel community pubs have been valued at around £450m, but could be worth considerably more if a sale-and-leaseback deal on more than 200 outlets is unravelled.

Laurel raised £320m last year through the deal with property company London & Regional, but has confirmed that a buyer would have the option to reverse the deal and gain ownership of the pub freeholds.

Laurel Pub Company received four formal bids for its community pub estate, which it put on the market in April. The four contenders are understood to have been Wolverhampton and Dudley Breweries, Greene King, Punch Taverns and Spirit.

The sale will leave Laurel, created in 2001 from the 3,000-strong former Whitbread pub estate, with 177 town centre outlets spearheaded by the Hog's Head chain.

Related articles:​

Four bidders chase Laurel community pubs (5 July 2004)

Laurel carved up in £400m pub sale (28 April 2004)

Laurel tight-lipped over £500m sale (18 March 2004)