Punch sells 869 pubs to Admiral

April 19, 2007: Punch Taverns has sold 869 leased and tenanted English and Welsh pubs to Admiral Taverns for £326 million.

The purchase price will take the form of £322.5 million in cash and £3.5 million in preference shares. Cash proceeds from the sale will be used initially to reduce net debt, said Punch.

For the financial year ended August 19, 2006, the pubs being disposed of generated EBITDA of £30.1 million. As at March 3, the pubs had a book value of £321 million. The sale is expected to complete in mid May.

Giles Thorley, chief executive of Punch Taverns, said: “This is an excellent transaction for Punch and in line with our strategy of continuously improving our high quality pub portfolio.

"We constantly seek opportunities to maximise shareholder value and this disposal represents a strategic sale of non-core pubs which do not fit our aspirations for business growth as we continue to build the UK’s premier pubco.”

Gary Landesberg, chief executive of Admiral Taverns, added: "“This is an excellent acquisition for Admiral Taverns. The majority of the pubs are freehold and the estate provides Admiral with further significant scale nationwide and excellent synergies with our existing pub estate. These pubs also fit geographically and operationally with our existing estate and will utilise our existing infrastructure.

“Our strategy is to acquire freehold tenanted pub assets where we believe there is the potential to improve their performance and to enhance their offering. We have acquired freehold pubs which will contribute to building a sustainable business for the long-term. This is another exciting step in the growth of the Admiral Group and we look forward to working with our licensees.”

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