Laurel lining up a flotation

LAUREL, the owner of 600 managed pubs, has dropped plans to remortgage its estate. Instead, it plans to float on the stock market next year.

The company has been looking at ways to raise extra cash since it decided to sell 1,860 leased pubs to Enterprise Inns for £875m. The deal was completed last month.

While this means the company is not short of cash, the rate of interest on its loans will increase sharply after two years, so Laurel is seeking additional funding.

It had considered remortgaging, known as securitisation - a way of raising money from financial institutions by 'selling' future revenues from assets such as pubs. But a company source told Financial Mail: 'Securitisation does not now make much sense with the number of pubs we have left. We are looking at refinancing and, while all options are open, flotation looks attractive.'

Laurel was created a year ago with the £1.6bn purchase of Whitbread's pubs estate by Morgan Grenfell Private Equity, which is owned by Deutsche Bank.

Apart from selling pubs to Enterprise, Laurel has offloaded many of its Dome chain of restaurants. This has left it with several High Street-branded pubs such as Hogshead and Casa, which are being redesigned as part of a comprehensive review of the chains.

Chief executive Ian Payne is understood to be 'desperate' to increase its number of pubs before flotation. The company wants to buy about 200, but has yet to find a deal that would fit geographically with its range of outlets and not need a substantial amount of refurbishment.

Meanwhile, tenanted pub company Pubmaster is to launch a £550m securitisation deal in September. The company is to remortgage the Inn Partnership estate, which it bought from Nomura last year, to match the already securitised Pubmaster estate. Finance director Ron Turnbull said the company was also looking for pub companies to buy, particularly in Scotland, as a way of expanding its 3,200-strong estate.

Small investors have applied for £125m of shares in this week's flotation of bookmaker William Hill. The shares are priced at 225p and 31,000 private investors have sent cheques. Trading in the £340m flotation will begin on Thursday.