Punch Taverns has announced the proposed disposal to Conviviality Brands Ltd of its 50% interest in Matthew Clark (Holdings) Limited for £100.7 million in cash. Duncan Garrood, Chief Executive Officer of Punch Taverns plc, commented:
“We are pleased to have agreed the disposal of our investment in Matthew Clark and at a significant premium to our current book value. The sale of a non-core business will enhance our financial flexibility to pursue our strategic objectives for our core activities.
“At the same time, we will enter into a 10 year drinks supply agreement with Matthew Clark for the supply of wines and spirits into the Punch estate.”
Summary
- Punch Taverns plc announces that it has entered into an agreement to sell the Group’s 50% shareholding in Matthew Clark (Holdings) Limited to Conviviality Brands Limited, a wholly-owned subsidiary of Conviviality Retail Plc. The total consideration for the Disposal is £100.7 million in cash.
- The total consideration includes a dividend of £1.5 million that will be paid by Matthew Clark to Punch Finco prior to Completion.
- Completion is subject to, amongst other conditions, the approval of shareholders of Punch and Conviviality Retail Plc. Subject to the satisfaction of these conditions, Completion is expected to take place on or around 2 October 2015.
- The Matthew Clark business is a 50/50 joint venture between the Group and Hertford Cellars Limited, a subsidiary of Accolade Wines Limited. As part of the same transaction, Hertford Cellars Limited will sell its 50% shareholding in Matthew Clark to Conviviality Brands.
- The Group equity accounts for the Matthew Clark joint venture. The unaudited value of the investment on the Group’s balance sheet as at 22 August 2015 was £52.3 million (FY14 audited: £50.5 million). The unaudited share of post-tax profit attributable to the Group’s 50% shareholding in Matthew Clark for the financial year ended 22 August 2015 was £7.8 million (FY14 audited: £6.2 million).
- Net cash proceeds of the Disposal, after transaction costs and expenses, amount to approximately £98.7 million. The sale will enhance the Group’s financial flexibility to pursue its strategic objectives.
At Completion, the Group will enter into a 10 year non-exclusive drinks supply contract with Matthew Clark Wholesale Limited. Under this supply agreement, Matthew Clark Wholesale Limited will supply selected wines and spirits drinks products for sale to members of the Group at agreed pricing levels.