London Town deal scoops up ex-Pubmaster boss Sands

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Sands, currently chairman of small leasehold pubs group GRS, and his long-term sidekick Richard Gundry, are taking over as chairman and chief executive respectively of London Town.

The enlarged London Town group will control 282 unbranded pubs nationwide after the purchase of GRS Inns, which runs about 60 pubs.

While London Town's assets are mainly freehold, GRS Inns' are leasehold. London Town says the merged group will be more flexible.

The deal is being paid chiefly with more than four million 85p shares in London Town, plus £485,000 in cash and the repayment of £325,000 loans.

As a result of the deal, Sands, Gundry and fellow joint owner of GRS Howard Thornton will own 13.5% of London Town.

Sands has a long track record in the brewing industry and helped create Pubmaster, building it into one of the biggest pubs chains with more than 3400 premises in the UK. He sold Pubmaster to Punch Taverns for £1.2 billion in 2003.

London Town has been struggling after going on an acquisition spree in the last 12 months. It bought 167 pubs in December 2006 and a further 41 in spring 2007. For the first six months of 2007, it recorded a pre-tax loss of £1.695 million, blaming "an increase in the number of closed pubs".

Last week, London Town announced that chief executive Mark Crowther, a former Carlsberg executive, had resigned after only nine months in the job. Andrew Wilson, chairman of London Town, who hired Crowther, is staying but becomes a non-executive director.