The £400m battle to run 3,000 pubs

Shock Heineken bid sparks a takeover war for Punch Taverns

BRITAIN’S second biggest pub group is at the centre of a £400m takeover tussle involving beer giant Heineken.

Punch Taverns, which runs 3,300 pubs, said it was in advanced talks with the Dutch brewer, which had made an offer of 174p a share – valuing the firm at £386m.

But a separate offer has been tabled by a private equity group backed by Punch co-founder Alan McIntosh.

The Scottish accountant and serial investor, 49, helped set up the business in 1997 but left in 2002 shortly after it floated on the stock market.

He was also co-founder of Spirit Group and the Wellington Pub Company, before setting up Emerald Investment Partners in 2012.

Now McIntosh, who is worth around £100m, wants to return and has offered 185p a share for Punch in an offer made through Emerald, although he has yet to secure financing.

Emerald already has a 2.2pc holding in the company, whose other shareholders include a string of US hedge funds, including Glenview Capital Management. It wants to pay £410m for the company and said discussions with Punch were ongoing.

Heineken’s proposal, made through private equity group Patron Capital Advisers, would see the pub chain split in two.

Heineken, which already owns 1,300 pubs under the banner Star Pubs & Bars, would take 1,895 sites after the sale, leaving 1,329 with Patron.

Patron, which has £2.9bn of capital in funds and investments, focuses largely on real estate across offices in Britain and Luxembourg.

The offers have surfaced after the company began to show signs of improvement, battling back into the black last month by posting an annual profit of £60m compared with a £105m loss the year before.

A restructure in September 2014 saw bondholders and shareholders agree a plan which gave bondholders an 85pc stake.

Punch was highly leveraged with debt in the early 2000s as it sought rapid expansion, a situa- tion that left it heavily exposed when the smoking ban, beer duties and the global downturn hit the industry.

Despite improved finances, the pub chain reported a slowdown in sales and warned the full impact of new pub tenancy rules was yet to come.

A spokesman for Heineken declined to comment, but it is thought its deal could run into competition concerns.

Punch shares closed up 37.7pc, or 48.5p at 177p.