Oct 06, 2003

S&N Retail Pub Estate Acquired by Spirit Group

Consortium Comprising Spirit Group Announces Acquisition of S&N Retail Pub Estate

Monday, 6 October, 2003 – Spirit Amber, a NewCo comprising the assets and management of the existing Spirit Group and a consortium led by Texas Pacific Group, Blackstone, CVC Capital Partners and Merrill Lynch Global Private Equity, has today acquired the Scottish & Newcastle managed pubs, restaurants and lodges business (S&N Retail) for a total consideration of £2.51bn.

Spirit, the fastest growing independent managed pub retailer, has 1072 outlets nationwide and employs over 17,000 people, with a strong portfolio of local pubs and market leading concepts including Two For One, Wacky Warehouse, Q’s, Tom Cobleigh and Bar Room Bar. Proforma turnover in the year to August 2003 was £514m, a 5.5% growth year on year, including turnover contribution from the recently acquired Tom Cobleigh estate of 75 pubs. Uninvested like for like turnover was up 1.9% for the 52 weeks ended August 2003, and up 3.1% for the twelve weeks ended 16 August 2003.

The S&N Retail estate comprises 1,406 outlets including 131 lodges, trading as Premier Lodge. It has approximately 29,000 employees and operates a number of attractive formats including Chef & Brewer, Premier Lodge, John Barras and T&J Bernard. The business operates outlets throughout the UK with an emphasis on London and the South East of England. For the year ended 27 April 2003, S&N Retail generated turnover of £1,043m, operating profit of £228m and, as at 27 April 2003, had net operating assets of £2,218m.

The combined estates are complementary, and together will create the market leader in the managed pub sector. Both businesses bring experience and expertise in locals, food-led pubs and accommodation. Increased economies of scale will drive greater operational efficiencies, with synergies in areas such as procurement and central buying.

The transaction, subject to Scottish & Newcastle plc shareholder approval, is expected to complete during November 2003.

Tony Campbell, Chairman of Spirit Amber, the new enlarged Group, commented:

“We are delighted to acquire such a high quality business with great pubs and people. I am confident that the business will continue to prosper as part of the new Group, which will be the leading managed pub business in the UK”.

A conference call for the newswires will take place at 0800hrs UK time. A conference call for national media will take place at 1200hrs UK time. Dial in details will be circulated to participants.