BRITAIN’S BIGGEST pubs group, Punch Taverns, is to split itself in two and sell thousands of its inns.

The company will be split between the Spirit managed pubs business and the struggling Punch leased operation. The split will take place before the end of the summer and comes after a long-running review of the operation.

The total number of Punch pubs – both leased and managed – in Shropshire is 109.

Nationally, around 3,000 pubs will be kept by Punch, while as many as 2,200 are expected to be sold.

Other pubs will transfer from leased to managed as part of the Spirit business, which will expand to just under 1,000 pubs.

The company says the move will create two independent public companies and allow the investment and development needed to speed up operational turnaround and drive growth.

Tenanted pubs are run by landlords who pay rent and rely on Punch for beer supplies.

Managed pubs, which have fared better during the recession, are run directly by the company and have more freedom on pricing.

The de-merger is expected to be completed by the end of the summer. Sales and closures will follow over five years, with more than 500 pubs to be shed every year.

The plan follows an internal review, launched by chief executive Ian Dyson after his appointment in September.

He said today splitting the 800-strong Spirit business from Punch’s leasehold pubs would allow the two operations to focus on their needs.

Bosses say the leased business needs to be “repositioned” by almost halving the estate to a core of around 3,000 “high quality” pubs. Poorly performing pubs will be sold off .

Punch, which is based in Burton-On-Trent needs to reduce its £3bn debt pile, acquired partly through the £2.7bn purchase of rival Spirit in 2005.

“A demerger will provide the platform to enable both businesses to focus on the very different strategies required to deliver shareholder value and will provide choice and liquidity for investors,” chief executive Ian Dyson said.

“Spirit will be positioned to deliver market leading sales and profit growth and to expand with the aim of becoming the UK’s leading managed pub operator.”

By Business Editor Thom Kennedy