PUNCH TAVERNS PLC

Punch Taverns plc

Punch Taverns plc

Punch Taverns plc (LSE: PUB) is the largest pub and bar operator in the United Kingdom, with around 6,800 leased, tenanted and managed pubs. It is headquartered in the traditional brewing centre of Burton upon Trent in Staffordshire.

In 2002 Punch demerged the Spirit Group and then floated itself on the London Stock Exchange. Punch bought Pubmaster in November 2003: the acquisition of larger rival Pubmaster, catapulted the operator to number one in the league. The acquisition took the group to more than 7,000 pubs and cemented Punch's position as a major pub operator. After completing this deal Punch later bought InnSpired Inns plc, and then Avebury.

Meanwhile, Spirit Group (at that time independent from Punch Taverns) expanded when it acquired Scottish & Newcastle's 1,450-strong pub estate in 2003, beating off rival Mitchells & Butlers.

In September 2005, Spirit Group sold its "City Nights" portfolio of in excess of 180 pubs and clubs, en-bloc, to Alchemy - the financial backers behind the newly-formed Tattershall Castle Group (TCG).

In December 2005, Punch agreed to re-acquire the Spirit Group for £2.68bn which since 2002 been owned by the private equity firms Blackstone, Texas Pacific and CVC Capital Partners.

In 2006 the Company sold its Old Orleans pub chain, which it had acquired when it bought Spirit Group, to Regent Inns. Punch also sold 290 Spirit sites to the private equity firm GI Partners.

In March 2008 Punch withdrew from a bid to merge with Mitchells & Butlers.

On 22nd March 2011 Punch announced that as part of a strategic review it would demerge its the managed and leased pub divisions into Spirit plc and Punch plc.

On May 13, 2009, the House of Commons published a report regarding its monopolies inquiry into pub groups. The report "raises a series of questions about the pub company (pubco) tied pub business model and calls on the Government to act urgently, in particular, to refer the matter to the Competition Commission. It challenges the pubcos which operate a tie to prove its benefits by giving lessees the choice between a tied or free of tie lease." The report also raises issues regarding the actual conduct of pubcos in dealing with struggling tenants.

Committee chairman Peter Luff, MP says: "The report explicitly acknowledges that 'not all the problems of the pub industry come from the tied pub model. It is clear there are many pressures on any retail business ... Nonetheless, our inquiry found alarming evidence indicating there may be serious problems caused by the dominance of the large pub companies.'"

The Committee commissioned its own independent survey as part of the inquiry, to determine whether the negative evidence received from lessees was typical of feelings in the industry.

"The survey results, printed with the Committee's evidence, underpinned the Committee's findings. 64 per cent of lessees did not think their pubco added any value and while a fifth had had a dispute with their pubco, few (18 per cent) were satisfied with the outcome. The Committee was astonished to learn that 67 ...