W&D bids £119m for Burtonwood chain
Friday 28th January 2005 11:28
Brewer and pub operator Wolverhampton & Dudley (W&D) has tabled a £119m offer for Burtonwood, which has 460 pubs in North-west England and North Wales.
The bid follows W&D's June purchase of the Wizard Inns estate in southern England.
Its offer of 550p per ordinary share is backed by 51.9% of Burtonwood shareholders, including all but one of the directors.
Burtonwood's mostly freehold community outlets are a good fit with W&D's portfolio, where 90% are community pubs and 96% are freehold sites. About 420 of Burtonwood pubs are leased or tenanted.
Richard Gilchrist, Burtonwood chairman, said rising costs and legislative pressures had made future growth more difficult for smaller pub companies such as Burtonwood. These pressures include Government concerns over escalating alcohol consumption, and proposed smoking regulations.
The takeover would result in annual savings of £3m in operating and distribution costs.
Burtonwood achieved a pre-tax profit of £10.1m on a £50.4m turnover in the year to 3 April 2004. Its pubs generate average earnings of £52,000 each a year.Pub points
- In the year to 2 October 2004, W&D boosted pre-tax profit by 6.3% to £77.7m on turnover 4.7% ahead at £513.7m.
- Pathfinder Pubs, which manages 513 sites for W&D, increased turnover by 9% to £275.2m and operating profit by 10.2% to £58.4m. Food accounted for 29% of sales, rising to 60% in food-led pubs.
- Union Pub Company, which runs 1,162 leased and tenanted outlets for W&D, boosted sales by 2% to £118.2m and operating profit by 3.9% to £50.9m
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