Deutsche Bank is understood to be conducting a beauty parade of potential advisers to a possible IPO of Orchid Group, M&C Report has learnt.
The bank, which has been weighing options for the 240-strong managed pub and pub-restaurant operator since before Christmas, is now understood to be leaning towards a listing of the business, after receiving a number of approaches from would-be advisers to an IPO, and given the current succession of companies heading for the public markets.
M&C Report understands that Deutsche and the Orchid management, have in recent weeks seen a number of investment banks, including Canaccord, Investec, Lazard, Nomura, Numis and STJ Advisors. Deutsche could also handle the process itself through its own securities division.
The bank is still assessing options and may yet elect to pursue negotiations to sell Orchid to a preferred private bidder, or extend its ownership to 2015 or 2016.
Orchid is believed to be generating run-rate ebitda north of £30m, therefore an IPO could value the business at between £250m to £300m.
Orchid recently announced the extension of its capital investment programme having already invested the £20m originally earmarked for the reinvigoration of the estate. The group is spending “several millions” on 13 further pub investments this quarter, with more set to follow for the rest of 2014.
It thought that around 50 pubs have so far benefitted from the investment programme.
Deutsche has a controlling stake in the business by dint of a debt-for-equity swap that saw the bank take control of Orchid in 2010.
Deutsche Bank appointed Sapient Corporate Finance to advise on options for the business last autumn. While trade players including Stonegate, Spirit and Greene King are thought to have expressed an interest in the business, it is believed that private equity firms and investment groups have lodged the most competitive bids.