Exclusive: Young & Co to buy Geronimo Inns

Young's, the London-based pub operator, is close to buying Geronimo Inns, the managed pub business established more than a decade ago by Rupert and Jo Clevely.

Geronimo Inns would not comment and Young's would only confirm that it had entered into discussions regarding the possible acquisition of the managed operator. "There can be no certainty that any transaction will be concluded, and a further announcement will be made as appropriate," it added.

Despite this the deal is likely to be sealed in a matter of weeks. It will see Geronimo's 26-strong estate of pubs - comprising 10 freehold and 16 leasehold sites - sit alongside Young's 120 managed pubs.

The Publican​ understands that Rupert Clevely will remain with the business and further that he will take a seat on the Young's board alongside chief executive Stephen Goodyear.

Shareholders in Geronimo Inns include the Clevelys and private equity group Penta Capital.

There has been speculation for some time that Penta, which first invested in the business four years ago, wanted to realise its investment in the group. Geronimo has consistently denied reports, some fairly recent, that it was up for sale or about to merge with a rival London operator.

Meanwhile negotiations are believed to be underway with landlords of a number of Geronimo's leased pubs to confirm a change of control of the company, suggesting the deal is close to being sealed. The group's landlords include Punch Taverns and Enterprise Inns.

Geronimo has been growing its estate steadily for some time, with last year's deal to buy four freehold and two leasehold pubs from Punch Taverns the biggest single acquisition undertaken by the group since its inception.

Choosing to acquire pubs in high-profile locations, including the Betjeman Arms in St Pancras international railway station and the Bull in the new Westfield Shopping Centre in West London, Geronimo's most recent acquisition was the lease of the former Broadgate Exchange bar in the City of London, which was previously owned by Tattershall Castle Group. That venue reopened recently as the White Horse after a £300,000 refit.

In March this year Geronimo announced turnover in the then-year to date had risen by 44 per cent, boosted by the six ex-Punch pubs. This trading momentum is understood to have continued throughout the rest of 2010, helped by a buoyant London economy.

Once completed, the deal will be a coup for Young's, which has missed out on a number of recent acquisition opportunities including several of Punch Taverns' managed pubs which were put up for sale last year.

Last week Young's announced turnover for the year to September 27, 2010, had risen 0.7 per cent to £67.7m, while pre-tax profits rose four per cent to £11.9m.