Deutsche plans to sell posh pub operator Orchid

DEUTSCHE Bank is planning to sell Orchid, the pub company behind the Living Room and Bar Room Bar chains, just over a year after taking control of the group.

Orchid, whose chains also include Asian restaurant The Oriental Group, a number of carvery pubs, and the Prohibition cocktail bars, runs almost 300 establishments in the UK.

It fell into Deutsche Bank’s hands after a debt-for-equity swap early last year that saw private equity firm GI Partners, the previous owners of Orchid, lose out.

After a £50m investment in the estate, as well as the booming popularity of high-end pubs that serve food, Deutsche is ready to make an exit. The bank is working with pub sector specialists Sapient on the deal.

Sapient has previously advised RBS on its 2011 sale of its 918-strong tenanted estate to Heineken, as well as advising Mitchells & Butlers and Greene King. Deutsche Bank and Sapient did not comment yesterday.

Orchid, which saw sales rise to £180m in 2011, the most recent set of publicly available accounts, is among a number of pub groups that have benefited from consumers looking to eat out for less than they would pay at a restaurant. The company’s carvery business saw food sales up 10 per cent in the year.

The group’s restructuring last year, which came after it warned that it was likely to breach existing covenants, was the second in four years. After it was formed by GI Capital, which paid £571m for 290 Punch Taverns pubs in 2006, Orchid went through a pre-pack administration in 2008.

The business, which at last count employed around 6,500 staff, could be worth up to £300m.