UK: My Best Deal - Nazmu Virani, chairman and chief executive of Control Securities. (2 of 2)

UK: My Best Deal - Nazmu Virani, chairman and chief executive of Control Securities. (2 of 2) - In 1984, while negotiating the purchase of a hotel, Virani was introduced to Belhaven, a small Scottish brewery, by its chairman, Eric Morley of Miss World fa

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Last Updated: 31 Aug 2010

In 1984, while negotiating the purchase of a hotel, Virani was introduced to Belhaven, a small Scottish brewery, by its chairman, Eric Morley of Miss World fame. Shortly afterwards he bought out Morley and acquired control of the company. Despite producing what he claims is "the Rolls-Royce of beers", Belhaven was in deep trouble. With just 12 tied houses, only a fraction of its output was being sold. But by offering generous bank guarantees he was able to buy 200 new tied pubs and increase Belhaven's sales from 3,000 barrels a year to 30,000.

By the time that he sold the brewery, for £25 million, in 1986, it was making a profit of £1.7 million a year.

Without Virani, Belhaven soon ran into trouble. His successor, Raymond Miquel, moved away from brewing and into fast food. In May 1987, in a £98 million deal, he picked up the Garfunkels restaurant chain. Fifteen months later, following a boardroom row, Miquel was replaced by Garfunkels chief Philip Kaye. Virani seized his chance. Kaye, he knew, was not interested in beer. For £17 million he bought back the brewery business.

"It has to be my best deal," says Virani. "I sold for £25 million and bought back for £17 million. It was the best Christmas present I've ever had." That deal was followed by further purchases - including 128 pubs from Grand Metropolitan for £21 million and 80 from Brent Walker for £16 million - to bring the total number of pubs in the group to the present 820.

The reason for Virani's euphoria can also be explained by his timing. Following the recent Monopolies and Mergers Commission report into the brewing trade, no brewer is allowed to have more than 2,000 pubs, and tied houses must stock "guest" beers. When they sell their pubs, Virani will buy - at knockdown prices. At the same time, he reckons, in the pubs that they keep, the big companies would rather sell the product of a small brewery like Belhaven than that of a major competitor.

He claims that he cannot lose. Based on his earlier assessment of what a deal is worth, Belhaven is probably worth a round-the-world cruise.

(Chris Blackhurst is City editor of the Sunday Express.)

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