Fuller's and Young's Battle For Cubitt Pubs

Two of Britain's biggest pub groups are competing to acquire a collection of popular London drinking venues in a move that highlights continuing demand for premium sites in the sector.

Sources have told Sky News that both Fuller, Smith & Turner and Young's have lodged offers to buy Cubitt House, which owns three pubs in the Belgravia area of Central London and another north of Oxford Street.

The Cubitt House portfolio comprises some of the capital's best-known pubs: The Thomas Cubitt, which is named after London's famous master-builder, The Orange, The Alfred Tennyson, and The Grazing Goat.

The value and timing of the deal are unclear, and a source close to the process, which is being run by an advisory firm called Sapient Corporate Finance, said there could also be other bidders for the group.

The interest of Fuller's and Young's in buying Cubitt House underlines the acquisitive nature of the companies, and their interest in strengthening their presence in areas characterised by significant consumer spending power.

Fuller's, which also has substantial brewery operations, announced earlier this year that it was increasing its dividend by 10% after strong sales of food and coffee across its estate of nearly 400 pubs, which are concentrated in London and the south-east.

“Today’s potential customer wants something very different from pubs than they did 10 year ago. Increasingly our pubs are opening for breakfast, our pubs have very powerful WiFi now, they serve freshly cooked foods throughout the day,” Simon Emeny, Fuller's chief executive, said in June.

News (Other OTC: NWSAL - news) of the battle to buy Cubitt House comes in the same week that a much larger pubs operator, Mitchells & Butlers (LSE: MAB.L - news) , announced that it was parting company with its chief executive following a period of sluggish sales.

Fuller's and Young's both declined to comment, as did a spokeswoman for Cubitt House.