Pub Transactions Part II

As featured in the latest edition of Bowler Magazine

I mentioned in my previous article that many clients ask me how they can progress a pub transaction with convenience and ease. Once the parties have entered into a short form heads of agreement which outlines the fundamental commercial terms of the deal, the next step is for the buyer to conduct their due diligence on the pub.

Typically, a purchaser will enlist the services of their solicitor and accountant to conduct specific investigations regarding the assets of the pub. This process may occur before contract signing, or alternatively, the buyer might enter into a contract to acquire the pub while retaining the right to terminate the agreement later if the due diligence outcomes prove unsatisfactory.

Initiating discussions with your accountant and auditor regarding the planned transaction at an early stage is crucial. It is essential to gain insight into the present financial status of a pub which is being targeted, with a particular focus on its existing liabilities. In particular, examining and validating the audited financial statements, management accounts, budgets, and business plan for the pub is essential to confirm that the financial standing accurately mirrors the representations made by the seller.

The legal due diligence process would ordinarily involve reviewing title details, leases, encumbrances, zoning constraints and statutory searches of any real property, building certificates and fire safety certification of any buildings, employment issues, security interests registered over any business assets, etc. It is also important to conduct some due diligence on the seller to ensure their registrations are current, they are not subject to insolvency or other court proceedings and they have complied with their general obligations to operate of pub.

The seller can expediate this process by having all the legal and financial information ready for the buyer and its advisors. The best method of providing this information to a buyer is through a data room which continue to be added to as the buyer conducts their due diligence enquiries. We would ordinarily provide a request for information (RFI) to the seller requesting details based on the search results of buyer’s due diligence investigations.

There are a number of steps that still need to be completed to progress the matter through to settlement, which we will discuss in the next edition of the QHA.


“The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.”
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