£2bn battle of the pub giants

A FIERCE battle to become Britain's biggest pub operator broke out this weekend as two rivals each tabled bids of £2bn for Nomura's 4,300 pubs.

Enterprise Inns and Punch are competing to tie up a deal to acquire the Unique and Voyager chains before 20 March - a deadline imposed by Schroders, the investment bank handling the sale.

Guy Hands, Nomura's top financier, risks losing a £50m bonus if a sale is not agreed by then, say sources. Enterprise Inns has the backing of a private equity group led by Cinven and including Legal & General Ventures.

Punch chairman Giles Thorley has managed to unite its disparate shareholders behind the bid, which would see him integrate the pubs into his 4,000-strong estate. The company has decided to table a bid despite being in the closing stages of plans to float on the stock market.

But a company source said that while the timing of the Nomura pubs sale was 'inconvenient', Punch was 'very excited by the cost-saving possibilities'.

Thorley, advised by investment bank Merrill Lynch, is the former chief executive of Unique. He is understood to be extremely keen on the deal, despite scepticism in the City about whether Punch is a serious bidder.

But he faces strong competition from the Enterprise team. Enterprise, which could not bid on its own because the tight deadline does not give it time to seek shareholder approval, plans to put cash into the venture and will manage the estates on behalf of the consortium.

The company, which is being advised by investment bank Morgan Stanley, has a stock market value of £620m. It intends to keep its 3,500-strong estate separate to start with, but has longer-term plans to integrate its pubs with those of Nomura.

The leading players have been linked to previous pub deals. Legal & General lost out to Nomura in the bidding for the Bass pub estate, while Cinven was once interested in Whitbread's outlets.