Merger affects 100 pubs

12:29pm Tuesday 5th February 2008

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THE FUTURE of almost 100 Hampshire pubs could be affected by plans for a massive £3.7 billion merger between two of the country's biggest landlords, writes Gareth Lewis.

Punch Taverns, which owns more than 60 pubs in and around Southampton, aims to merge with troubled rival Mitchell & Butlers, which owns 28 pubs in Hampshire.

The deal would cement Punch's position as Britain's biggest pub company, with more than 10,500 sites.

Its 62 local sites include The Highfield pub in Highfield Lane, the Malvern Tavern in Shirley, and three in Bevois Valley Road - the Hobbit, the So Bar and Kolebka.

The move comes after Birmingham-based M&B - owner of chains including All Bar One and Harvester - last week racked up £274m in losses following a collapsed £5 billion property deal last summer.

It has seen its stock market value drop 50 per cent since the summer from a peak of £3.6 billion, and in December it was relegated from the FTSE 100 Index.

The firm's finance director resigned and the group confirmed potential takeover interest in a turbulent week for the business.

Under the merger, Punch and M&B's shareholders would each own 50 per cent of the new company. M&B's shareholders would also receive a cash payment of £175 million.