Punch Taverns has confirmed the sale of 869 leased and tenanted pubs to Admiral Taverns for a total of £326m.
The deal comprises £322.5m in cash and £3.5m in shares, which Punch will use to reduce its net debt.
Admiral has paid an average of £375,000 per pub, which for the financial year ending 19 August 2006 generated earnings before interest, tax depreciation and amortisation of £30.1m.
It is expected to go through in mid-May. On the 3 March the pubs had a book value of £321m.
"We constantly seek opportunities to maximise shareholder value and this disposal represents a strategic sale of non-core pubs which do not fit our aspirations for business growth as we continue to build the UK's premier pubco."
Punch Taverns joined the FTSE 100 list of leading shares yesterday and formed a joint venture with drinks wholesaler Constellation Europe.
The deal pushes Admiral Taverns estate above the 2,000 pub mark which, in terms of size, puts it up with the other big five Greene King, Marston's, Mitchells & Butlers, Enterprise Inns and Punch themselves.
By Christopher Walton