Hundreds line up for Punch pubs

Around 450 individual licensees have tabled bids for their Punch pubs through a single broker, Acorn Commercial Finance.

The quantity of offers reflects the enormous interest from hosts in buying their pubs.

Paul Thompson, partner at the firm, said offers range "massively", from under £100,000 to well over £1m. He added: "The majority are around £500,000".

According to Thompson, the 450 deals could be completed within six weeks if offers are agreed. "It depends how close to the book value the offer goes in. Punch may come back with a refusal, a suggested price or an acceptance. A standard response at the moment is 'Your unit is not up for sale. If your offer was substantially increased we may consider it'."

Thompson added that in some cases a figure that is likely to be successful is suggested. "It takes longer to negotiate if you don't know where you're aiming. We're working on a desktop valuation first. Once on the right track, we go out with a professional valuation," he said.

Although funding for the pubs under offer has been agreed in principle, Thompson said final approval will not be given until the formal valuation has been carried out. But he added the firm's close relationships with lenders gave "a very strong indication" that applicants would get the funding required.

Thompson said he expects to hear within the next few weeks on around six deals that are with solicitors. A further 12 are with banks, 20 are waiting on valuations, while the rest are waiting on agreed offers. "This is a brilliant opportunity for tenants. The amount of money a pubco takes out of a unit compared to an individual with a mortgage and discount in place means the pub becomes a much more viable business."

Chris Heard, joint managing director at Marlborough Leisure, which provides funding to the licensed leisure sector, said: "We have completed on six or seven deals so far, and we'll end up closing 15 to 20 deals by the end of this procedure in June.

"We've had 200 to 300 licensees approach us, and we've told 15% to 20% of those we can help them. They need to have a cash stake or other security, clean credit and banking, and profitable accounts".

Punch corporate affairs director Nigel Turpin said: "We are pleased with progress on sales to individual licensees and look forward to providing a more detailed update in our half-year results in a couple of weeks."