The splitting in two of Britain’s biggest pub company will cost £30 million in advisers’ fees and reorganisation costs, it emerged yesterday.
Punch Taverns confirmed that the demerger of Spirit, its managed division, would take place this month, with trading in the shares of the Spirit Pub Company starting on August 1.
The listing prospectus reveals that Spirit will adopt a “progressive dividend policy”, with a payout ratio of 33 per cent of net income from April 2012.
The Punch chief executive Ian Dyson, who will take the helm at Spirit, said that the separation costs included fees to advisers, led by Goldman Sachs, as well as pension top-ups and some redundancy costs. He said that the scale of the costs was low when set against the combined enterprise value, including debt, of about £4 billion for the two companies.
Spirit will have 803 pubs under brands such as Chef & Brewer and Fayre & Square plus 549 leased pubs. Up to 100 of the leased pubs will be converted to its brands and the rest sold to reduce its net debt of £740 million.
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The Punch business will comprise 5,080 pubs, although 2,000 will be sold over three to five years. The scale of the disposals means that holders of its £2.4 billion of securitised bonds will be consulted.
Despite suggestions that the Punch equity will be worthless after the spin-off, Mr Dyson was adamant that its net asset value of £400 million, equivalent to about 65p a share, was achievable.
He dismissed complaints that bondholders would be disadvantaged by the demerger, insisting that they would not need to take a haircut on the value of the bonds if the strategy envisaged for Punch went to plan.
Mr Dyson skirted suggestions that, once the turnaround of Spirit was established, he would hand the reins to Mike Tye, the deputy chief executive, in a pact akin to that between Tony Blair and Gordon Brown. “I’m not sure Mike would appreciate being compared to Gordon Brown,” he said.