Punch licensees will get option to buy their pub in sell-off

Punch Taverns plans to offer some of its lessees the option to buy the pubs they run as it seeks to downsize its non-managed pub operations over the next five years.

Speaking in the City this afternoon, as the pubco revealed it planned to de-merge its Spirit managed pub business into a separately listed company, Punch's chief executive Ian Dyson said some of the group's partners would have the chance to bid for their pub, much as they did two years ago when the pubco opened its 'purchase window' and invited operators to make the Burton group an offer for their businesses.

Dyson said he envisaged the core leased pub estate being around 3,000 "high quality" pubs, with around 2,200 non-core pubs being sold off in the next five years.

The new-look Spirit operation will house between 900 and 950 pubs, with 150 of the leased pubs in the business being converted back into managed houses and a further 450 leased pubs sold off.

Dyson said: "In cases where it is deemed to be up for disposal an existing lessee will get the option to buy their pub."

Questioned as to the likely identity of buyers for the rest of the non-core estate, Dyson said he envisaged there being a whole range of purchasers, including regional brewers, competitors and private individuals.

"We've sold 1,500 pubs over the last two years. We plan to sell off around 500 pubs a year, which is slightly less than what we achieved in 2009 and 2010," he added.

Dyson acknowledged that the emphasis of the sell-offs would be concentrated in areas where many of its underperforming pubs were located, including the Midlands and the North of England.

On the background to the split, Dyson said both group's current strategy and its structure were not sustainable and it had to act to maximise value for shareholders, bondholders and stakeholders alike.

"The company wouldn't fail if we didn't do this, but it wouldn't maximise the returns that are possible either if we took no action," he said. The de-merger simply recognised the group's current circumstances, he added.

Asked by The Publican ​who would manage the new companies, Dyson said the board and management of both entities would be finalised "in due course", although he paid tribute to the efforts of both Mike Tye, who currently heads Spirit, and Roger Whiteside, who is managing director of the Punch Partnership leased business.

"These two have done a terrific job. The majority of the credit should go to them," Dyson said.