ELDRIDGE POPE, the struggling West Country pub operator, called time on its turnaround strategy yesterday and accepted an £82 million bid from Michael Cannon, the wealthy pub entrepreneur.
The decision to recommend the 171p-a-share offer from SDA, Mr Cannon’s investment vehicle, follows protracted attempts by Susan Barratt, the group’s chief executive, to restore its fortunes following a string of profit warnings.
Miles Templeman, the Eldridge Pope chairman, admitted that the “back to basics” strategy implemented by Ms Barratt had “not been reflected in an improved trading performance as soon or as strongly as we had hoped”.
The offer from Mr Cannon, who has bought and sold several pub companies, including JA Devenish and Morrells of Oxford, is worth £42.3 million, or £82 million including debt. The deal will be partly funded by £48 million of debt from Bank of Scotland.
The deal brings down the curtain on a company that started life in 1837 when the Pope family opened a brewery in Dorchester. The firm, in which the family still has a stake of about 26 per cent, quit brewing in 1997 to focus on pubs, but in recent years it has suffered from stiff competition and tough trading.
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Most of the Pope family have accepted the bid but they will not be severing their ties completely. Under a share alternative, existing shareholders will get the chance to invest in SDA’s bidding vehicle on the same terms as Mr Cannon, up to a maximum of 21.25 per cent of the new company.
Ms Barratt, who will leave with an estimated £180,000 payoff, will be replaced by Paul Beadle, chief executive of SDA, together with other SDA directors.
Peter Large, who becomes commercial director, said that £14 million would be spent on improving Eldridge Pope’s 151 pubs, of which 44 are tenancies. He added: “Some will be sold, others will be bought.”
He said that the Toad brand would be scrapped, with some sites possibly being converted to SDA’s Que Pasa bar concept.
SDA has received acceptances in respect of 41 per cent of the shares, including the 22.3 per cent stake that it has built up since June last year.
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The 171p bid follows an abortive approach last year from Wolverhampton & Dudley Breweries worth about 155p.
REGENT INNS, the embattled pub operator, has moved swiftly to plug the hole left by the sacking last week of its two executive directors by appointing Paul Felton-Smith as interim finance director. Mr Felton-Smith, a former finance director of Asprey & Garrard, the jeweller, is expected to review the group’s finances.