Highlights

• Acquisition values Pubmaster at approximately £1,193 million, (including the assumption or repayment of approximately £1,025 million of debt), with a payment of approximately £5 million in respect of working capital 
   
• Over 3,110 leased and tenanted pubs, bringing the enlarged group total to over 7,400 pubs post On-Sale
   
• Increases Punch’s critical mass and firmly consolidates its position as one of the two leading operators of high quality leased and tenanted pubs in the UK
   
• The Directors believe that there is significant opportunity for improved returns from focused investment in the Pubmaster Estate
   
• Acquisition funded from the net proceeds released from Punch’s recent refinancing, existing cash resources and new bank facilities
   
• Expected synergies in excess of £10 million per annum
   
• Earnings enhancing, pre synergies, from the date of Completion* 
   
• Will generate returns in excess of Punch’s weighted average cost of capital in the first full year after the acquisition**
   
• On-Sale of some 200 pubs from the combined estate to address potential competition concerns

The Acquisition is conditional upon the approval of Punch Shareholders. A Circular providing further details of the Acquisition and convening an Extraordinary General Meeting will be posted to Shareholders shortly.

In addition, Punch has today separately announced its preliminary results for the 53 weeks ended 23 August 2003.

Giles Thorley, Chief Executive of Punch, commented:

“This is a transformational deal for Punch and represents a quantum leap in terms of Punch’s growth. The Pubmaster Estate provides an excellent strategic and geographic fit with our existing portfolio and nearly doubles the size of our estate. The acquisition also provides shareholders with a strongly enhanced earnings profile and excellent growth potential.”

Punch will be hosting a presentation for analysts today at 9.30 am at the offices of College Hill, 78 Cannon Street, London EC4N 6HH. Please call Vikki Wyatt at College Hill on 020 7457 2020 for further details.

* Shareholders should not infer from this statement that earnings will necessarily be greater for the Company in such period than during the current financial year
** Shareholders should not infer from this statement that returns will necessarily be greater for the Company in such period than during the current financial year

Ends