A series of bids for the up-market pub group Orchid are believed to be being evaluated by its owner, Deutsche Bank, with a final decision on the purchaser expected in the coming days.
Deutsche put the business up for sale last summer, believing that the turnaround in the business that the combination of £50m of investment and the economic upturn had produced meant that it was time for another company to drive it forward. At the time sources suggested that Deutsche was looking for around £300m (US$505m).
It is understood that much interest has been expressed in the group, which runs around 200 pubs but that a price tag of nearer £250m has proved more realistic. Mitchells & Butler’s is understood to have expressed strong interest in the group’s food-based pubs, which includes The Great British Carvery, Pizza Kitchen & Bar brands and the small chain of Oriental Group restaurants, but is thought to be less interested in the “wet-led” outlets.
However, it faces stiff competition from a number of other companies who may be willing to buy the whole group. These are thought to include trade buyers such as Greene King and Sprit, as well as a series of private equity bidders including Starwood Capital and Colony Capital.
Industry analysts point out that many pub groups are looking to offload their tail of weaker pubs at present, hence perhaps the time it has taken for this deal to be agreed. Greene King offloaded a portfolio of 275 pubs last month and Heineken, Enterprise, Punch and Marston’s all have significant portfolios up for sale.