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Thu 12th Jan 2017 - Leisure market active and readily liquid for company deals in fourth quarter
Leisure market active and readily liquid for company deals in fourth quarter: The market was active and readily liquid for company deals in the fourth quarter of 2016, according to the latest UK Leisure Sector report by agent Fleurets. The period had seen political change in the US as well as an emerging picture of how the UK’s decision to leave the European Union will be implemented by the government. But the market had been active with Punch’s board accepting a £402.7m takeover bid from Heineken and Patron Capital in December, highlighting British pubs remained attractive to investors, the report said. Meanwhile, in October, Boparan Restaurant Holdings acquired 33 Ed’s Easy Diner sites in a pre-packed administration. November saw further activity with Shepherd Neame acquiring Village Greene Restaurants for £11.85m consisting of five freehold sites within Kent while Cairn Group added five hotels to its portfolio for £75m from Hotel Collection. Meanwhile Fuller’s acquired two managed sites in London – The Gun, Docklands, and The Half Moon in Herne Hill – while Mitchells & Butlers placed 75 pubs on the market. December saw Park Holidays UK sold by Caledonia Investments to Tiger Bidco for £362m while Just Eat acquired rival HungryHouse from Delivery Hero for a figure that could rise to £240m. The report stated: “The final quarter of 2016 has seen political change across the pond in the US as well as an emerging picture of how the UK’s decision to leave the European Union will be implemented by the government. Notably in this quarter, though there has been an increase overall in leisure tourist visitors, there has been a decrease in overseas visitors in comparison to the same period last year. However, owing to the continuing surge in strength of the US dollar and lingering weakness of sterling, the levels of overseas visitors may yet increase to take advantage of this situation. The results being that more domestic visitors are choosing to holiday within the UK, spending at home as UK destinations increase in relative competitiveness – a trend that is being bolstered by Whitehall’s ‘Tourist Action Plan’. Though to date there has not yet been a definitive tourist surge post referendum, visitor numbers would not immediately respond to global macro-economic trends. The market has been active and readily liquid for company transactions. Most recently during December, Punch’s board accepted a takeover bid from Heineken and Patron Capital Advisors LLP at a figure of £402.7m, highlighting that British public houses remain attractive to investors. A large proportion of the public houses within the UK will now be owned by Heineken, adding to the Star Pubs & Bars estate it acquired from Royal Bank of Scotland in 2008. Enterprise Inns cited decreasing financing costs for the strong year end, turning around a loss of £65m to £71m profit after tax. A restructure to smaller more controllable estates has also aided this. It will be intriguing to see what the first quarter in 2017 brings in the lead up to the triggering of Article 50 and further developments in the government’s Brexit plans.”


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