Laundy said to be bidding for debt-laden pub group Redcape A BID has been made for National Leisure and Gaming's pub operating business and 22 hotels owned by the former Hedley Group, now Redcape. Sources close to the deal understand the Redcape board has received a recent indicative offer from a representative of Arthur Laundy's family's hotel business to buy the 22 pub properties that Redcape leases to NLG, which are valued at about $280 million.
Sources said that as part of the proposal, the legendary pub family would also buy the NLG leasehold pub business, which some say is worth between $40m and $80m, despite owing $140m to the National Australia Bank.
A bid was strenuously denied by the Laundy family yesterday.
The South Australian-based Independent Pub Group has also made approaches over recent months to NLG and Redcape. However, the gaming giant Tabcorp, which has previously eyed NLG's pub operating business, is understood to have lost interest.
Start of sidebar. Skip to end of sidebar. .End of sidebar. Return to start of sidebar. Woolworths-backed ALH Group also had signalled it could be a contender for NLG's pub leaseholds, but would not comment this week.
Last month, The Australian reported that the banks were tightening their grip on the Tom Hedley-founded pub owner Redcape. The receiver of a major shareholder nominated two new members to the board ahead of further anticipated asset sales, which were to be voted on at the Redcape annual general meeting in Melbourne today.
Redcape is buckling under the pressure of $697m worth of loans.
Chairman Colin Henson said the board had received several expressions of interest for Redcape as a package, but would not comment further.
The 49 per cent shareholder of Redcape -- in the hands of receiver Justin Walsh of Ernst & Young Brisbane -- is one of Mr Hedley's collapsed companies, TWH (Qld) Pty Ltd. Mr Walsh is acting on behalf of Suncorp Metway and would not comment.
Investors went on a pub-buying spree at the peak of the market, but the sector was among the hardest hit during the global financial crisis.
This was after some took out large loans on the back of lucrative leasing deals, inflating property values in the boom. But now some pub tenants pay rents that are so low, they barely cover costs.
Private investors such as Sydney businessman John Singleton and investment banker Mark Carnegie have been buying pubs in the past year, snapping up some assets for almost half the price they previously traded at.
Some sources also suggested that the family of Harvey Norman chairman Gerry Harvey could be involved in the Laundy offer.
The retail billionaire teamed up with Mr Laundy, Mr Singleton, and an ally of the late Kerry Packer, developer Robert Whyte, to snare the troubled Steyne Hotel in Manly in April. The high-profile consortium is understood to have paid about $27m for an asset that sold for $47m in 2006 just before the peak of the market.
Mr Harvey also denied any interest and his son Michael offered no comment.
Craig Laundy, who runs the Laundy family's pub operations, has a 14 per cent stake in NLG and is a board member. His brother Stuart and father, Arthur, also previously sat on the NLG board.
Yesterday, Craig Laundy strongly denied claims an approach had been made to NLG or Redcape for assets.
"We may be interested over time for the odd pick-up of them, but not at their current book value because they are ridiculous. They don't reflect the market," Mr Laundy said.
"The industry is in the toilet and money is hard to come by.
"There are some major problems and they have got some fundamental issues. "
Redcape made a $73m net loss for the last financial year when it sold 12 pubs and extended its loan deadline to October 2012.
One of its key tenants, Hedz Pty Ltd, is also in receivership. It has 93 properties, including 78 pubs, 12 bottle shops and three other retail tenancies along the Australian eastern seaboard.
Previous reports suggest that in June 2007, NLG made agreements with Laundy as well as Tom Hedley worth $234.5m.
Redcape was previously named the Hedley Leisure & Gaming Property Fund.
Shares in NLG last traded at 0.7c and Redcape at 11c.
NLG Price at posting:
0.7¢ Sentiment: None Disclosure: Held
