Morgan Grenfell is preferred bidder for Whitbread

The private equity firm was the original backer for Luke Johnson in his bid for the pubs.

Morgan Grenfell Private Equity, the private equity arm of Deutsche Bank, has won preferred bidder status in the race for Whitbread’s 3,000-strong pubs estate, unconfirmed reports indicate. The private equity firm declined to comment on reports.

The private equity firm, which is being financed by US investment bank Lehman Brothers, is thought to have submitted an offer in the region of E1.6bn.

Morgan Grenfell had been backing Luke Johnson, owner of the Belgo restaurant chain, in his bid for the pubs. Johnson however was prevented from bidding by ‘non-compete’ clause he signed with his Pizza Express co-founder Hugh Osborne.

Dresdner Kleinwort Wasserstein, the investment bank advising Whitbread on the sale, received four bids before a deadline on Friday, The Financial Times reports.

A joint bid from private equity firm Candover and Pubmaster, financed by Credit Suisse First Boston, is believed to have been approximately E1.5bn. And Nomura’s principle finance group is thought to have bid E1.5bn also.

Punch Taverns, the pub operator led by Hugh Osborne is thought to have expressed its formal interest in the pubs but not, as yet, to have submitted a formal bid.

Morgan Grenfell Private Equity is backing Whitbread's current management.