FDBusiness.com

Punch Taverns, the UK’s leading pub group operating over 6,700 leased and managed pubs nationwide, is to be divided into two separate companies. The decision follows a strategic review, initiated by new chief executive Ian Dyson, of the group’s operating performance and capital structure.

The review concluded that the group’s current strategy is not sustainable and that structural change is required to drive value for shareholders. This entails the separation of the managed and leased businesses and will be achieved by demerging the managed operation, Spirit, from Punch to create two independent public companies. The demerger is expected to be completed before the end of the summer.

“A demerger will provide the platform to enable both businesses to focus on the very different strategies required to deliver shareholder value and will provide choice and liquidity for investors. Spirit will be positioned to deliver market leading sales and profit growth and to expand with the aim of becoming the UK’s leading managed pub operator. Punch will be positioned to drive long term value by downsizing to a core estate of around 3,000 pubs with the aim of becoming the UK’s highest quality and most trusted leased operator,” explains Ian Dyson.