London Town buys 39 pubs

London Town plc has announced it is buying 39 pubs from a property holding company for £16.24m, an average of £416,000 per pub.

The group is buying the pubs - which comprise 30 freehold and nine leasehold properties - from a company called Save, which is owned by Incorporated Holdings Ltd (IHL).

The deal increases London Town's portfolio of pubs to 225 sites, after first entering the market last year with deals in May and December. The majority of the pubs being acquired in this latest transaction are located in the North and West of England.

The group is planning to borrow £12.7m from its bankers Anglo Irish and launch a near-£10m share issue to help fund the acquisition.

In an acquisition statement London Town said it estimated the portfolio would provide a gross income of "around £1.14m" a year, before charges payable to County Estates Management, which is running the pubs.

IHL is one of three groups - the others being Burac and Robar - that have conditionally agreed to subscribe for the issued shares, dependent upon shareholder approval at an extraordinary shareholder meeting being held on April 10.

London Town said that 29 of the pubs were being bought for their long-term trading potential, with the remaining 10 sites being traded, but with a view to being developed for alternate use.

London Town announced last month that Mark Crowther, founder of the Front Room bar chain, had been appointed chief executive of the group, effective March 26.