Bidding for $3.6Bn Pub Estate Hots Up

LONDON-The auction by brewer Scottish & Newcastle (S&N) of its 1,450-strong pub chain is expected to see at least seven bidders submit second-round offers today.

The £2.3 billion ($3.6 billion) auction will enter its second phase tomorrow and is expected to see some of the contenders joining up to form consortia. Simon and David Reuben are understood to have submitted the highest indicative offer last month but are in talks with a venture capitalist and Japanese bank Nomura about making a joint over.

At least seven bidders are expected to submit new offers including Pub groups Pubmaster and Spirit, both backed by venture capitalists. Other interested parties include Mitchells & Butlers, French private equity group PAI and CVC/Cinven.

The book value of the estate, which includes Chef & Brewer, Rat & Parrot and Premier Lodge, has been put at £2.3 billion ($3.6 billion) but city analysts expect it to fetch at least £200 million ($315.6 million) more.