Pub group joins forces with rivals

PUNCH Taverns has announced a bid to create a £3.7 billion pub giant by merging with troubled rival Mitchell & Butlers.The deal would cement Punch's position as Britain's biggest pub company with more than 10,500 sites.

PUNCH Taverns has announced a bid to create a £3.7 billion pub giant by merging with troubled rival Mitchell & Butlers.

The deal would cement Punch's position as Britain's biggest pub company with more than 10,500 sites.

The move comes after Birmingham-based M&B - owner of chains including All Bar One and Harvester - last week racked up £274 million in losses following a collapsed £5 billion property deal last summer.

Under the merger, Punch and M&B's shareholders would each own 50 per cent of the new company, with M&B's shareholders also receiving £175 million in cash payments.

Punch, which boasts a pub estate comprising 8,450 sites, including scores in Suffolk, said the cost-saving logic behind the deal was “compelling”.

The boss of the new company would be current Punch chief executive Giles Thorley, with M&B's chief executive, Tim Clarke, becoming chairman.

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Investec Securities said that, if the deal went ahead, the merged company would have 17 per cent of the UK's pubs market.

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