Punch Taverns Share Discussion Threads

[jeffian] 06/12/2010 10:12

Re: 1281, it's difficult to see how PUB or ETI could sell or debt/equity swap their tenanted estates with bondholders without maintaining some sort of head leasehold interest as a mechanism for the new owners to get a return. The trouble is that a significant part of their income comes in the form of wholesale profit on beer sold into the estate, a service which CVC and other private equity houses do not provide. I suppose they could come to an arrangement with a wholesaler, but in that case they'd still require a management team to operate the 'tied' estate - errrr....someone like PUB or ETI!

[vaulted] 05/12/2010 23:15

cheers jeffian,

Interesting times ahead then.

[jeffian] 05/12/2010 22:56

vaulted,

Not at all. The lessee has the benefits of, and is bound by, the terms of their lease whoever owns the freehold. I saw a lot of comment from publicans in the Morning Advertiser and the Publican who were crowing about the possibility of getting rid of their pubco landlords if PUB or ETI got reeled in by their bondholders. Be careful what you wish for! If the banks and bondholders take over, the tenants are still subject to the terms of their leases and they may find that they have a rather less sympathetic or knowledgeable landlord.

[vaulted] 05/12/2010 22:03

how will this effect lease holders,any ideas anybody TIA

[jas_ron] 05/12/2010 21:22

Mail on sunday apparently says private equity firm cvc interested.

[jas_ron] 05/12/2010 21:21

a bid is on its way - cvc?

[timbo003] 05/12/2010 15:06

I do not hold Punch (PUB), but I do hold Enterprise (ETI) and Marstons (MARS) and Green King (GNK), so I found this article in the Mail on Sunday a bit interesting!

[jeffian] 02/12/2010 13:04

careful,

Who would be out of PUB, or who would be out of pubs? There is a difference!

[careful] 02/12/2010 12:39

with the world cup to be announced and the olypics 2012, a royal wedding in 2011, who would be out of Punch.
this nation knows how to party and drink. any excuse.
the local pub will make a comeback.
the centre of the community.

[timbo003] 30/11/2010 08:33

This article is a couple of days old now, but it is an interesting read as it compares the business models for Enterprise and Punch

[timbo003] 29/11/2010 11:09

The publican has picked up the Times story too, their summary is here:

[careful] 29/11/2010 09:24

the market likes this story.
the new ceo means business.
shares up today.

[careful] 28/11/2010 12:28

radical proposals possible according to sunday times.
selling 6000 pubs to bondholders to clear debts.
that would leave 800 directly owned with negligable debt.

[diku] 16/11/2010 23:04

When the tough gets going they move on...during good times they like to enjoy carrot...

[timbo003] 16/11/2010 12:38

See comments on Enterprise and Punch on today's ftalphaville markets live:

[careful] 16/11/2010 09:55

this looks bad.
the company should say something.
our assets are tempting and the capitalization is very low.
shares in free fall.

[careful] 16/11/2010 09:27

finance director steps down, shares fall.
what the hell are they all up to?

[careful] 14/11/2010 11:39

What is Giles Thorley up to, and will it affect Punch.
Sunday Telegraph reports that he is in talks with the original backers.

[jazza] 11/11/2010 12:09

jeffian - 4 Nov'10 - 11:43 - 1266 of 1269

Indeed, looks like a hatchet job gleefully given voice by those twin pillars of objectivity, the FTAlphaville boys..

If it were your mortgage, you'd be pretty comfortable with it..

Capital Structure
Net debt reduced by GBP322 million (9%) to GBP3,143 million
Outstanding securitised debt has a 17 year average maturity and weighted
average cost of 6.8% Debt repayments and management actions to date have helped maintain headroom against financial covenants.

[jeffian] 11/11/2010 12:00

Yes, there is. Used to be common practice among all brewers/pub owners, not just pubco's. As business reduces (particularly in wet-lead pubs) makes sense to limit the competition, particularly in small towns, villages or rural locations. Thus, in a village which may have had, say, 3 marginal pubs, 2 get sold for conversion to residential and the remaining one gets increased trade (theoretically!). It was one of the issues picked up by the recent Parliamentary enquiry into the pubco's, and believed to be one of the drivers behind so many pub closures, so most of them have agreed to stop doing it now as part of their new Code of Practice. Not so sure myself; you can't buck the market and these things have a way of sorting themselves out. Look at the sort of pubs which are closing then note that Wetherspoons are scheduled to open 60 new pubs this year and see what conclusions you draw from that!

[overline] 11/11/2010 11:09

Read somewhere that pubcos can insist that when selling one of their pubs which is within the locality of another of their pubs, they can insist that the sold premises is not used as a pub. Is there any credance to this?

[jeffian] 04/11/2010 11:43

I agree it sounds a bit hysterical, careful. The first line of security for bondholders is the underlying assets (the value of the pubs) and insurance would only seem to come into it if PUB's asset value fell below its debt. As that relationship (debt/value) is governed by covenants and PUB has reassured the market several times that they are trading within covenant limits, I don't understand how anyone can talk about fresh injections of equity or bondholders 'taking a haircut'. On what basis?

The analyst at share price is no friend of the pubco's and has 'form' (at least, I think it was him) when he had to retract statements made about ETI debt structure last year which he had simply got wrong. Anyway, if analysts had a clue, they'd be out there making money from a proper job!

[careful] 04/11/2010 09:36

what borrocks.
if an insurer goes bust you move to someone else.
everything at a price.
these shorters magnify this problem.
opportunities for the brave, pub are trading well and making disposals.
worth a punt, nothing has changed.

[crosswire] 04/11/2010 06:50

Investors were steering clear of Punch Taverns, which dropped 3½ to 65.55p, as Seymour Pierce kept its "sell" rating on the pub group on reports that Ambac, the US bond insurer could be facing bankruptcy. Hugh-Guy Lorriman, a leisure analyst at Seymour Pierce, said Ambac had insured a substantial proportion of the higher rated debt within Punch's securitisations.

He said the implication of a potential bankruptcy of Ambac was unclear, but could be material for Punch stakeholders. If the insurance simply disappears and the immediate result is the downgrading of the underlying Punch debt by debt agencies, "this will precipitate the discussion between debt representatives and other (especially equity) representatives," he said.

"What is the likely result of this? Either (1) debt holders demand additional equity injection to prevent longer term default probability or (2) debt holders agree on some form of 'haircut', or, as per 2009, sell out at a significant discount," he added.

[h4rsh2] 03/11/2010 21:09

Larry Robbins' Glenview Capital Increases Position in Punch Taverns (PUB)
Larry Robbins' hedge fund Glenview Capital has disclosed an updated stake in Punch Taverns (LON: PUB) due to trading on October 28th. Per UK regulatory filings, the hedge fund now owns 16.77% of PUB shares outstanding and this is an increase from their previous ownership of 13.01%. We'll be updating the rest of the latest changes in Glenview's portfolio in our Hedge Fund Wisdom newsletter when our new issue comes out in two weeks.

This is the second time we've seen Glenview raise its stake in Punch. We originally highlighted their additional purchase of shares in July. In fact, Robbins seems to like the UK pubs theme in general, as he's also invested in Enterprise Inns (LON: ETI) last we checked.

Taken from Google Finance, Punch Taverns is "engaged in the operation of public houses under either the leased model or as directly managed by the Company. The Company operates in two business segments: punch partnerships, a leased estate and punch pub company, a managed estate. Punch Partnerships is the Company's leased division, comprising 6,841 pubs nationwide. Punch Pub Company is its managed division, comprising 835 pubs nationwide."