The sale of Heritage Pub Company, the 235-strong tenanted group formed out of the Pennant Inns business, appears to have stalled.
A formal offer for the business, which was first marketed for sale last October has failed to materialise after the group entered two separate periods of exclusive negotiations with R20 and Pubfolio respectively.
Other trade buyers, including Admiral Taverns, London & Edinburgh and Punch, are known to have looked at the business.
The vendors price expectations of about £75m is understood to be based on "run rate" barrelage projections. Around 35,000 barrels currently goes through the estate on an annual basis but Heritage says this will be up to, if not beyond, 40,000 barrels once the impact of some £5m in capital expenditure starts to pour through.
A source close to the negotiations said: "This would suggest there is either a problem over the quality of the portfolio, or a problem over price - or both. If I was the vendor I would not be terribly happy if after more than six months, the auction process was still ongoing."
The business was first marketed for sale in mid-October, 2004 and soon entered a period of exclusive negotiations with R20, property entrepreneur Robert Tchenguiz’s buyout vehicle.
R20 allowed this period to expire without making an offer and some weeks later acquired the 364-strong Globe package from Spirit Group.
Heritage opened up the auction for a second time at the end of December before entering an exclusive period with Pubfolio, Peter Shalson’s pub group that acquired 545 pubs from Punch Taverns in December for £162.5m.
This agreement expired in February, once again without a formal offer for the business materialising.
To compound the apparent problems in selling the business Chesterton’s, the property agent that had been appointed to conduct the sale, entered into administration in March, with the leisure team led by Philip Booth moving across to GVA Grimleys.
The business is owned by property company Atlas Way and pub entrepreneurs John Finney and David Harrison. Managing director John O’Neill also has an equity stake in the business. It was formed out of the collapsed Pennant Inns business.
Finney and Harrison sold their previous 55-strong pub venture - also called Heritage - to Pubmaster three years ago for £19m.
A source added: "This looks like a busted process. The problem is that two companies have conducted a lengthy period of due diligence before apparently walking away - they may just be stalling in an attempt to get a better price but all the other potential buyers will be wondering what they saw and didn’t like."
