Reuben brothers table bid for struggling PBR
Jun 16 2009 by Peter McCusker, The Journal
STRUGGLING leisure company Premium Bars and Restaurants may shortly be placed into administration before being bought for around £48m by the billionaire owners of Newcastle Racecourse.
Brothers David and Simon Reuben, who own the London-based property and private equity empire Reuben Brothers, have tabled a bid for the firm, which operates bars including Blu Bambu, Sea, Chase and Jimmyz nightclubs in Newcastle as well as the Living Room restaurant on Grey Street.
A spokesman for Reuben Brothers, which bought Newcastle Racecourse operator Northern Racing for £90m in 2007, said one option being considered would see Premium being placed into administration and subsequently purchased.
He said: “Initially we were considering a bid as part of a consortium with some of the existing management but last week we made a bid on our own. The success of the bid depends on a number of factors including the banks agreeing to continue with the existing debt facilities.
“There is no single plan at this stage and some of the existing shareholders may yet join us in the bid. One possibility being considered is a pre-pack administration.”
The proposals may yet prove controversial with the banks owed over £50m by the company and millions of pounds still owed to trade creditors.
However the Reuben Brothers spokesman said if the deal succeeded they planned to run the business under the existing management team, safeguarding the jobs of hundreds of staff.
Earlier this month The Journal revealed that the Reuben Brothers, who are said to be worth over £4bn, were interested in buying the company.
The pair already have a 25% stake in the business, which owns 48 outlets in the UK, including the Waterside Hotel on the Quayside and the Rex Hotel in Whitley Bay.
Premium has had a tough couple of years, with its latest figures for the year to last June 30 revealing a £21.4m loss before tax, which included a writedown of £20.5m. Many of its problems have come from its acquisition of the 13-strong Living Room restaurant chain from Manchester-based Living Ventures Limited in 2007 which was funded with £32m of bank lending.
Premium began life in Newcastle as Ultimate Leisure, where it grew to be one of the UK’s biggest bar opertors, before changing its name in 2007 and moving headquarters to Cheshire last year.
A change of direction followed the departure in 2005 of founding directors Bob Senior and Allan Rankin with the vertical drinking specialist which had come to symbolise Newcastle’s reputation as a party city focusing more on bars offering food and entertainment. Mr Senior went on to launch Utopian Leisure.
