Barracuda angles for a £300m sale or float

BARS and pubs group Barracuda, which operates the Smith and Jones, Varsity and Barracuda chains, has appointed investment bank Citigroup to advise on a potential sale or float that would value the company at up to £300m.

The move follows a period of rapid expansion for Barracuda, which runs 160 sites. In the year to September 2004, sales grew by 14% to £94.4m.

Barracuda also managed to avoid the struggles of other High Street names over Christmas and enjoyed a 2% growth in trading over the seven weeks to the beginning of January.

Under chief executive Mark McQuater, a former executive of rival JD Wetherspoon, the company has become one of the best performers in the sector.

Insiders suggested the chain was looking to consolidate its position by floating, or backing from a new private equity owner. A refinancing is also being considered.

Sources said that the group was under no pressure to decide on a strategy, but that it intends to grow through acquisition and is unlikely to be sold to a trade buyer.

The group was formed in July 2000 after it bought 35 pubs from Enterprise Inns for £50m, backed by PPM Ventures, the private equity arm of Prudential.