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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Punch Taverns - Big acquisition fuels share surge

December 2003

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • PUB
Less than two weeks after we tipped acquisitive tenanted pub landlord, Punch Taverns, it has pulled off another big deal.  The shares leapt 49p to 398p on the day Punch revealed it had acquired Pubmaster for £1.19bn.  At a stroke, the addition of Pubmaster's 3,127 predominantly freehold pubs makes Punch the largest pub operator in the UK, with over 7,400 pubs.  The vast majority of the Pubmaster estate are community locals and strengthens its presence in East Anglia, the North East and SouthWest.  Analysts estimate thatthe acquisition, which cost just under 10 times Punch's historic EBITDA, will be more than 10% earnings enhancing, even before the £10m expected synergies and 5% reduction in debt servicing cost ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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