Patron Capital completes acquisition of Punch Taverns

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Punch Taverns, which owns around 3,200 sites leased out for bars and pubs, has been sold in a deal worth £1.8 billion.

It was been acquired by pan-European institutional investor Patron Capital, which specialises in property-backed investments, valuing the pub company’s equity at around £402 million.

To satisfy concerns over competition, nearly 1,900 of Punch’s sites are due to be sold this week in a £1.2 billion deal to Heineken UK, which leases sites through its 1,100-strong Star Pubs & Bars business.

This will leave the new owners of Punch with around 1,300 sites. Punch will continue to oversee the sites on behalf of Heineken for six months under a transitional services agreement.

Patron’s partner on the investment is May Capital, the London-based private equity investor and adviser with experience in the pub industry.

The sale of the sites to Heineken will enable a “renewed level of operational and investment focus” and, in some cases, it will allow them to accelerate or enhance key elements of the Punch management team’s strategy including investing in sites and adapting and modernising operating models such as the roll-out of the pubco’s managed house format.

Keith Breslauer, managing director of Patron Capital, said: “Completing this complex deal paves the way for an exciting future for Punch as a more focused business. This is a company that has undergone a number of challenges and distractions in recent years but has a portfolio of high-quality pubs with excellent future potential.

“We are experienced investors in the leisure and hospitality sector, having invested in and grown a range of businesses including Generator, the Spencer Hotel in Dublin and Jupiter Hotels.

“Under private ownership, with strong financial backing and our commitment to continued investment, Punch’s pubs and publicans will have our full support to deal with changing market dynamics and provide their customers with the best possible offer.”

Duncan Garrood, chief executive of Punch, added: “This has been a long road and we are delighted that we are now able to move forward with clarity. I am proud of the professionalism of the Punch employees during this period of uncertainty, and remain sure of their ongoing commitment as we look to an exciting future under new ownership.”

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