Spirit close to £108m deal for Tom Cobleigh

Spirit Group, the private pub company headed by former Café Rouge boss Karen Jones, is in talks to acquire the rival Tom Cobleigh chain for £108m.

The company, which already has 1,150 pubs under such brands as Mr Q's and Wacky Warehouses, is understood to be conducting detailed due diligence on the 75-strong Tom Cobleigh estate with a view to agreeing a formal deal within the next few weeks.

Tom Cobleigh was put up for sale at the end of last year by venture capital firm Electra Partners Europe, which acquired it in September 2000 in a £90m buyout from Rank Group. Some 48 of the 75 pubs trade under the Tom Cobleigh brand, with the rest operating as Mighty Nice Pubs.

According to City sources, Spirit believes that, under its management, the Tom Cobleigh business can improve its earnings from about £11m to at least £16m. It is not known whether the Tom Cobleigh and Mighty Nice Pub brands would be retained, although Spirit is expected to convert a number of sites to its Wacky Warehouse concept.

Spirit, originally the retail arm of Punch Taverns, was founded in 1999 through the acquisition of thousands of pubs from Bass and Allied Domecq. It was demerged from Punch in March last year ahead of the latter's stock market flotation and is now backed by the US private equity firms Texas Pacific Group and Colony Capital and individual shareholders.

Spirit, which has postponed plans for its own flotation, is also thought to be one of several potential bidders for 51 Beefeater pub-restaurants put up for sale in January by Whitbread for an estimated £40m to £50m. Greene King and Noble House, the pub company controlled by Robert Breare, are also known to be eyeing the sites.

Jones was unavailable for comment as Caterer went to press.