Administrators appointed at Sir John Ritblat’s pubs chain

Published 14th Oct 2009

Sir John Ritblat, the veteran property magnate who turned British Land into one of Britain’s top companies, has suffered a setback to his pub ambitions after the appointment of administrators to his fledgeling Merchant Inns chain.

Although its seven outlets, mainly pubs with hotel rooms and restaurants, are said to have been trading strongly, administrators from Deloitte stated that they had been appointed after “the discovery of a number of previously unknown financial liabilities”.

The business, set up by Sir John two years ago as a joint venture with Robert Breare, the leisure entrepreneur, has been put up for sale through Colliers Robert Barry, with analysts predicting that it could fetch up to £25 million. The agency is part of Colliers CRE, the quoted property consultancy chaired by Sir John.

Sir John, who is being tipped as a candidate to buy back Merchant Inns, teamed up with Mr Breare in October 2007 to acquire the chain when it had five pubs. The two men each put in £1 million of equity, with Sir John investing several million pounds of mezzanine finance.

At the time, the duo talked boldly of investing as much as £200 million to develop Merchant into a chain of 50 high-quality pubs with accommodation. It has subsequently bought two properties, including the Saracen’s Head in Great Dunmow, Essex, pushing its debt up to about £13 million.

The appointment of administrators comes a few weeks after Mr Breare quit the business after what was described as “an angry and fundamental dispute” over strategy.

It is believed that while Sir John wanted to slow down expansion, Mr Breare was keen for Merchant Inns to carry on growing.

Analysts expressed surprise at the appointment of Deloitte, given reports of strong trading in recent weeks. Deloitte was unable to shed any light on the nature of the “unknown financial liabilities”, which were mentioned in the press release from Colliers but excluded from the Deloitte release.

Mr Breare was until recently chairman of Hilwood Resorts & Hotels, a luxury hotel group controlled by Delancey, the property vehicle of Jamie Ritblat, Sir John’s son. Mr Breare is understood to have left the post after his exit from Merchant Inns.

Neither Mr Breare nor Sir John could be reached for comment.

Source: ' Times '

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