Private equity hits back after union blames it for mishandling business

THE body representing private equity players has hit back at comments by the GMB union against pub group Punch, following its announcement of a demerger.

Unions claimed Punch’s debt pile had been triggered by private equity failures and suggested that the business was being poorly run.

The GMB described private equity as the “fifth horse of the apocalypse” in its attack.

But the British Private Equity & Venture Capital Associations (BVCA) jumped to the defence of Punch, which it said had never been outright owned by private equity anyway.

Tim Hames, head of public affairs at the the BVCA, said: “The union has invented a form of management organisation – ‘private equity inspired’ – unknown in the real world. Punch has never been owned outright by private equity. The company sold its Spirit division to a set of private equity houses in 2002 and bought back the much enhanced section in 2005, six years ago.”

The second company in the firing line was struggling housing group Southern Cross. Its shares crashed 65 per cent when it announced the end of an offer period for potential private equity bids. Hames said the company had not been owned by private equity since 2006. He claimed that the wider economy rather than any mishandling of the business had caused the problem.