UK: Shepherd Neame buys Punch Taverns pubs

    Shepherd Neame, the UK brewer and pub owner, has agreed to by 13 pubs from rival Punch Taverns for GBP14.86m (US$22.3m) in cash.

   
    All the pubs are located in Shepherd Neam's stronghold of the southeast of England and the deal is expected to be complete by 26 May, said the Kent-based brewer today (8 May).

   
    The move brings Shepherd Neame's total estate to 378 pubs, comprising 49 managed pubs and 329 tenanted and leased pubs.

The acquisition is expected to generate in excess of GBP1.9m in operating profits in the first full financial year to June 2010, with a positive impact on earnings, said Shepherd Neame, which brews Spitfire beer.

    Some of the UK's largest pub chains are under pressure to sell assets as the economic downturn intensifies pressure on the industry and eats into company finances.

    Punch, the UK's largest pub owner, last month reported  losses of GBP122m for the 28 weeks to 7 March.

Shepherd Neame said today that its balance sheet "remains strong".

    Its acquisition of the Punch pubs will be financed by a new five-year loan of GBP15m, arranged by The Royal Bank of Scotland and Lloyds Banking Group.

   
    At the same time, the company said its existing GBP10m revolving credit facility has been extended from 2012 to 2014.