An Alternative Kid On The Block

We have been formally advised that Punch Taverns has now accepted an alternative offer to that made and agreed with Sidbury Community Enterprises for the Red Lion. This alternative offer we have been told is at a price that is “no lower” than that agreed with Sidbury Community Enterprises. We make this point because we understand that it has been said, erroneously, locally that the agreed price now accepted was lower than that which was agreed with Sidbury Community Enterprises. This is incorrect.

We are also advised that the only reason why Punch Taverns has now accepted this alternative offer is because Sidbury Community Enterprises was unable, at this stage, to fully fund the purchase of the Red Lion.

We are sure that you will share the disappointment of the Management Committee in this turn of events. It is however perhaps not surprising that Punch Taverns, which has been trying to sell the pub for some 14 months now, has responded to an alternative potential purchaser in this manner. It was perhaps too big an ask to expect Punch Taverns to work with us for a few more months whilst we continued to seek to raise the outstanding balance required to fulfil our business intentions. I am told that Punch Taverns has set the alternative potential purchaser a relatively short completion timescale of 4 to 6 weeks, which would mean that by, approximately the end of July we will know whether we still have the opportunity to purchase the pub.

The Management Committee intend to continue to seek the capital grant and additional investment from potential shareholders that we previously said we would pursue. We appreciate the positive responses received from many investors and Campaign supporters to our proposal to apply for this grant. It is our view that we should continue in this way in case the alternative potential purchaser fails to complete on the sale. We remain committed to Sidbury Community Enterprises’ vision for the pub as a community owned village pub.

Obviously, the Management Committee will keep the situation under review. If the pub is purchased by the alternative potential purchaser then the Management Committee accept that will bring our bid to purchase the Red Lion to a disappointing conclusion.

We will keep you updated as information about the purchase of the Red Lion as matters progress.

A Great Response To The Share Offer

Sidbury Community Enterprises’ share offer has concluded after running for 5 ½ weeks. During this time it distributed share prospectuses across the whole of Sidbury. It also held two public open days in Sidbury village hall where it displayed the refurbishment plans that it had worked up for a future Red Lion business and were able to discuss the detail of the share offer with those who attended. In total around 150 people attended the Open Days and provided great positive feedback on the plans.

Sidbury Community Enterprises’ Chair, Fred Burnett, said “It has been most heartening to have received investments from more than 150 investors who have provided in excess of £100,000. We are incredibly proud to have raised so much money from such a large number of investors in a relatively short period of time. This, we believe, demonstrates that our vision for retaining the Red Lion has significant support. We always knew that our target to raise £200,000 through the share offer was challenging to say the least”.

Sidbury Community Enterprises business plan and the premise for the share offer required it to raise at least £200,000. As it did not manage to fully raise this amount through the share offer the Management Committee this weekend met to consider how to respond.

The Management Committee reaffirmed that it would only proceed to purchase the Red Lion on the basis of the proposals as set out in its vision statement and in the share offer prospectus. This means that it needs to raise around £133,000 from a mortgage and around £200,000 through shares, short term low loan(s) and donations. In its opinion it do not believe that a viable business could be created from significantly less a total investment.

For this reason it is, at this stage, unable to immediately move to purchase the Red Lion. It is however proposing applying for a non-refundable capital grant from Social Investment Business, which is a government funded organisation that supports social enterprises such as Sidbury Community Enterprises. This grant has only become available since it launched its share offer. It proposes applying for a grant of at least £100,000, which is the least that can be applied for, in order to make up the shortfall in the funds that it raised through the share offer.

If it is successful in obtaining this grant it would not be paid out until mid September. This would however allow it the opportunity to continue to seek additional investors who could purchase shares or provide it with donations.

None of this alters its business plan or vision for a future Red Lion business. It does however mean that the timetable for Sidbury Community Enterprises to purchase the Red Lion would slip until September.

The Management Committee also reaffirmed that should it fail to raise a total of around £200,000 from shares, donations and the grant then it would at that point determine that its attempts to purchase the Red Lion had failed. It is not prepared to try to purchase the pub, refurbish it and start trading on a budget that will not deliver a viable business.

Sidbury Community Enterprises has written to all those who invested to seek their agreement to this approach. It has determined that it will not cash any investments that have been made either through cheques or on-line until it is clear that it has the full amount of funds required to commence a viable business. It is however confident that its investors will agree with its approach and continue to demonstrate the faith that they have shown in the business plan and proposition to create a community pub in Sidbury, which their investment.