Rebel tenants threaten Inntrepreneur sale
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Your support makes all the difference.The sale of Inntrepreneur, the controversial pub group jointly owned by Fosters and Grand Metropolitan, is under threat after more than 800 pub tenants refused to sign up to Retail Link, a new lease which commits them to buying beer from the group.
Most of the rebels, which represent about a third of the company's tenants, are thought to be determined to take legal action against Inntrepreneur over their existing leases, which analysts believe could cost the group up to pounds 350m in damages. The move casts another shadow over GrandMet's proposed pounds 23bn merger with Guinness.
Inntrepreneur recognises that it could be forced to settle with many of the tenants in order to dispose of the business through a flotation, trade sale or management buyout. "We will have to find a solution to these problems," said Mike Foster, Inntrepreneur's chief executive, yesterday.
Inntrepreneur is considering chopping its sale price to take account of outstanding litigation or providing warranties to a purchaser to cover future legal liabilities. But it may have to break the group up and only sell those pubs which accept the new deal.
Julian Maitland-Walker, who runs Somerset-based solicitors Maitland Walker and represents more than 200 Inntrepreneur tenants, said yesterday: "There is no guarantee Retail Link will continue to provide beer discounts after September 1998. It would not be in the interest of new owners to give a discount which would cost pounds 40m a year so I have advised my clients to reject the deal."
The rebel tenants have battled with Inntrepreneur over the past eight years. They believe they have been forced to pay extortionate prices for their beer under existing 20-year leases. "Tied pubs had to pay 30 per cent more for their beer in some cases and they clearly got no benefits from being within Inntrepreneur. We will take legal action to recover these damages," said Mr Maitland-Walker.
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