Wetherspoon’s second cash call part of a ‘pub trawl’ by cash-rich industry figures
Tim Martin’s pub chain passed its super-sized pint glass around the City overnight in what was the FTSE 250 group’s second fundraising in nine months.
Martin, whose net worth in the last rich list was almost £450mln, said the recession caused by the economic impacts of the coronavirus (COVID-19) pandemic presented “opportunities for acquisitions at attractive prices”.
Wetherspoons, which said it spent £13mln on getting pubs ready for social distancing measures and made 378 employees at its head office and airport sites redundant last year, said the new cash will “facilitate the acquisition of new properties, which are likely to be available at favourable prices, as a result of the pandemic”.
It is already eyeing purchases of several freehold purchases in central London where it is currently the tenant, as well as properties adjacent to successful pubs.
“It may be possible to achieve a higher-than-average return on capital on properties acquired in the next few years, based on the company’s past experience,” it added.
This follows on from recent reports that ex-Green King boss Rooney Anand has drummed up a £200mln warchest from a US private equity firm to invest in UK pub assets and that an ex-Enterprise Inns director is part of a team launching a new pub venture called Valiant Pubs to invest in suburban and community pubs.
Liberum analyst Anna Barnfather said: “As visibility begins to improve on a reopening date for the sector, we expect M&A activity to quickly pick up in 2021 as well financed operators to look to expand estates on favourable terms.