Punch Taverns agrees to sell 158 pubs for £53.5m

Punch Taverns said it had reached an £53.5m agreement with a real estate trust to sell 158 pubs it deemed ‘non-core.’

The pub operator said the sale of the pubs to NewRiver Retail was at an average of £340,000 per pub, above total book value of £52.5m.

In a statement, Punch said the agreement was unconditional and expected to complete it on the 11 September 2015.

Punch said it would be paid in cash and the funds used to reduce net debt.

AIM listed NewRiver said the projected annual profit before tax of the portfolio was about £6 million, which will generate a cash on cash equity return in excess of 20%.

NewRiver said it had identified development opportunities within the portfolios such as residential new builds on surplus land, part-converting pubs into houses and building convenience stores on excess land.

After the sale NewRiver’s pub portfolio would account for about 15% of its total assets under management. It bought more than 200 pubs off Marston’s back in 2013.

Shares in Punch were down by 0.79% to 126p at 0851 BST, while NewRiver’s shares were also down, by 0.89% to 333.63p at 0837 BST.