Marston’s plans to take advantage of low property and construction costs with a £176m rights issue to expand its pub portfolio.
The brewer proposed that cash would be raised through an 11-for-10 rights issue, which will go before shareholders for approval at an EGM on 6 July.
Some £140m of the raised capital would be used to acquire and develop new pubs in the short and medium term, adding to the 2,200 managed and tenanted pubs it already operates. The company is making the move now as the board believes a wide variety of attractive sites are available on favourable terms.
Marston’s said it would target large, food-led outlets in dense population areas, It has built more than 30 new pubs in the past five years but expects the new programme to deliver 20 to 25 new pubs a year in the short-term, with 15 in the first full year to October 2010.
The remainder of the proceeds from the rights issue would be spent on “opportunistic repurchases” of some of Marston’s securitised debt, as well as giving it the possibility of acquisitions.
“The rights issue will allow us to take advantage of situations arising in the current economic climate and accelerate the roll-out of the new build pubs in attractive locations at attractive investment costs,” said chief executive Ralph Findlay.