Capital Pub Company, the managed pub operator, has this morning revealed plans to buy Tomahawk Pubs for £5.03m and said it would part fund the deal via a £2.8m share placing.
The move comes after the news it had asked shareholders for permission to raise further funds should “earning-enhancing acquisition opportunities” become available and after it revealed ambitions, following yesterday’s results, to reach an estate of 50 in the next three years.
Today, Capital revealed it had made a 120p per share offer for Tomahawk, the small Enterprise Investment Scheme (EIS), in a deal slightly below the net asset value per share of the company as stated in its accounts. Tomahawk currently owns the Morgan Arms in Bow, London E3 and the Black Swan in Ockham, Surrey, both of which are operated by Geronimo Inns.
The acquisition of Tomahawk takes Capital to 30 pubs.
In the year ended 30 June 2009, Tomahawk recorded revenue of £2.3m and a profit before tax of £20,915. For the 44 week period to 2 May 2010, the combined turnover of Tomahawk's two pubs was £2.1m and ebitda was £551,854.
James Bruxner, chairman of Capital, said: "I am delighted to present this offer to the Tomahawk shareholders. Tomahawk's two pubs - the 'Morgan Arms' and the 'Black Swan' - are well-located freeholds which will fit well within Capital Pub Company's estate.
“Under Tomahawk's ownership, the pubs have developed a quality offering and a significant trading track record. The board hopes to be able to build on this success and believes this offer represents a fair value for the business in the current market."
John Harding Jones, chairman of Tomahawk, said: "I am very pleased that we have been able to achieve a sale of Tomahawk Pubs to the Capital Pub Company a fair price in very difficult market conditions.
“Since 2007, values have become more and more uncertain in the pub sector, even for popular and well operated pubs such as ours and funding also remains a major problem for potential purchasers. I am happy that all shareholders will have received a reasonable return on their investment, particularly after taking account of the benefits of the EIS."
