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Major pubcos to target up-and-coming rivalsMajor pubcos to target up-and-coming rivals
Research group predicts takoevers despite current environment
The pub industry’s leading players will be looking to pick off up-and-coming rivals as market conditions tighten, according to research published this week.
David Pattison, senior analyst at research outfit Plimsoll, said the significance of only 15 companies controlling 85 per cent of the market should not be underestimated.
“As the market tightens the major players have started to review their strategic options,” Pattison said.
“However their key strategy will be to look at the emerging sectors within the market and target their acquisition strategy at a group of 98 high growth, high margin players that are leading the industry forwards.
“The major players need to establish their position in these markets quickly, despite their reluctance to spend any cash. The penalty of not moving in now is too high for each of them.”
Plimsoll claimed that 417 heavily indebted public houses, bars & inns companies were now “paying the penalty”.
“Having invested heavily, they are now desperate to keep busy,” said Pattison. “They are a serious threat to pricing levels in the market in 2009. Their high risk strategy is in stark contrast to the 208 companies who have elected to run their businesses debt free, many carrying large cash surpluses.
Plimsoll predicted that in 2009 businesses “will act more responsibly, as banks and institutions tighten their lending policies. Against this backdrop, finance directors and executives need to think very carefully about their finance needs for next year and plan early”.
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