Nomura wins Bass pubs

Nomura has paid £625 for the Bass pubs estate. It may convert a large number of the managed houses to leased pubs.

Bede Acquisition Company Limited, a company formed and financed by Nomura International plc’s Principal Finance Group (PFG) has acquired 988 largely managed pubs from Bass plc for £625m. Nomura has been a contender for the pubs for the last four months.

The deal makes Nomura the biggest pub landlord in Britain. With the Bass pubs estate, Nomura will own more than 6,000 pubs, outstripping its closest rival, Punch Taverns, the privately owned operator with about 5,000 pubs.

John Denning is chief executive of the new company and the finance director is Andrew Winning. Nomura is likely to spend up to two years converting the estate from managed pubs into tenanted outlets, after which it is likely to securitise the income streams. This has become something of a hallmark for transactions led by the bank's principal finance team which is headed by Guy Hands, managing director of PFG. He said: “These Bass pubs give us excellent sites, a well maintained estate and an experienced management team. Our task going forward is to move the pubs from being part of a large centrally managed estate to a locally tenanted estate run by the best local entrepreneurs in each area. This will provide the pubs with the impetus to increase employment and profitability.

“We continue to believe, and have demonstrated, that there is considerable opportunity to add value by focusing on local pubs which are core to the leisure landscape of the UK.”

There had been reports that Legal & General Ventures, the other final bidder, had submitted a £620m bid but the group is believed to have withdrawn this late on Monday night.

Nomura is also bidding for Whitbread's 3,000-strong pub chain, put up for sale last month. The £1.5bn auction entered the final round of bidding yesterday, with three bidders left. The other bidders are private equity groups Cinven and Candover. Whitbread is looking for between £1.4bn and 1.6bn from the sale.