Spotlight – FD calls shots on pub deal

By next Tuesday evening Whitbread executives hope they will haveas presented new challenges to FD David Coldwell. passed the first hurdle in convincing those outside of the company – one of the country’s biggest brewers and pub landlords – that they can pull off the purchase of Allied Domecq’s 3,500-strong pub estate.

The deal is a complicated one, though the complexities of the beer business will be very familiar to the company’s shareholders as they gather for Whitbread’s agm in the City of London.

Because of the reforms of the brewing and pub industry in the late 1980s, Whitbread must sell off its brewing division, the Whitbread Beer Company, to be allowed to complete the £2.5bn purchase.

Much of the responsibility for delivering the deal rests upon the shoulders of main board finance director, Alan Perelman. But dealing with the consequences – the sell-off of the company’s brewing division – is David Coldwell, FD of the Whitbread Beer Company.

Subject to receiving the regulatory green light and shareholder approval – at an egm early next month – the purchase should be completed by August.

‘We would then have six months to separate my part of the business,’ says Coldwell who has been with the company for 20 years and finance director since 1989. ‘The route that’s being planned – and the preferred route – is demerging, partly because we see it as being attractive to shareholders and partly because it is something that can be achieved in six months.’

Coldwell expects a sale to generate ‘something in the £300m to £350m range’ and the company has not ruled out any options: while a share listing is the most likely solution, a trade purchase or a venture capital-backed management buy-out are possibilities.

The prospects for the sale are mixed. Whitbread has been a popular stock while its rivals have struggled this year. But critics say the beer company will struggle on its own. Whitbread does not own beers such as Stella Artois, Heineken and Boddingtons, it only brews them under licence.

Related reading

aidan-brennan kpmg