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Marston's is tapping shareholders for £176 million to take advantage of weakness in the pubs market.
It unveiled a rights issue this morning following a similar move made by Greene King two months ago. Punch Taverns also raised cash, but to pay off debt rather than expand.
Marton's, which brews beer such as Pedigree as well as running 1750 pubs, will spend the money it raises on buying new sites and building large, food-led pubs across the country. They will be near major roads, in retail parks and next to roundabouts.
Chief executive Ralph Findlay said: "It is not a refinancing, it is not speculative. We have a very high certainty over where we use these funds."
He expects to build 60 pubs in the next three years at a cost of £140 million and spend the rest of the money on buying pubs from rivals. "We are the only player in town as far as new build sites go," he said.
The 11-for-10 share offering is at a discount of nearly 40% to last night's share price of 140p. It more than doubles the issued share capital of the company. Banks including Cazenove share £10 million for arranging the deal. "There are fees," conceded Findlay.
Mark Brumby at Blue Oar Securities said: "This move is understandable. Opportunities abound."
