£48m bar and club sale falls through

Aug 5 2009 By Christopher Knox, The Journal

The slump in the leisure market has sped the company’s decline in the last couple of years. Its latest figures for the year to last June 30 reveal a £21.4m loss before tax.

Dermot Power, BDO business restructuring partner, said: "The sudden and sharp economic downturn, and subsequent recession, has impacted on the usually high disposable income of the group’s target market.

"These customers have begun to select the weekend for their discretionary spend. This shift has impacted significantly on a business with fixed overheads."

But he said BDO was confident of securing a sale of the business as a whole, despite its recent run of setbacks, which also include suspending its shares after being refused extra funding from its banks.

Despite the failure so far to agree a deal with Reuben Brothers, BDO said it hoped to complete a sale, albeit with "less risk" attached.

David and Simon Reuben already have a 25% stake in PBR and their business interests include Newcastle Racecourse operator Northern Racing.

Their spokesman said: "We very much still intend to reach an agreement on a deal and have been told that our bid is the highest of those competing.

"The new arrangement is designed to leave us with less risk as part of any deal."