Confirmation from Enterprise Inns that it may, if it wants, convert into a tax-efficient real estate investment trust (Reit) has set the pubs sector alight.
Pub shares were already on the way up today, after an upbeat trading statement from the Restaurant Group suggested consumers may not have turned their backs completely on going out. Talk that Enterprise had been granted Reit status was also doing the rounds before the official announcement.
By converting to a Reit, the company will reduce its tax payments, but to be eligible it has to derive 75% of its revenues from rent. Revenue and Customs has now agreed - after discussions dating back to October - that Enterprise meets the necessary criteria, provided it agrees to an internal restructuring. Enterprise is now looking at the detail of such a project before deciding whether to proceed, which could take several months.
But analysts believe many other pub companies could follow suit, now Enterprise has paved the way.
The news saw Enterprise shares jump 29%, up 115.25p to 510p while rival Marstons climbed 34.5p to 234p, Punch Taverns 60.5p to 600p and Greene King 55.5p to 590.5p.
So with traders increasingly talking of a possible UK interest rate cut tomorrow after a series of gloomy economic data, the FTSE 100 closed 45.8 points higher at 6261.0.
On the speculative front, the Best Buy for Carphone Warehouse tale refused to go away. There had been talk of a carve up of Carphone between Best Buy, which owns 3% of the company, and Vodafone. Traders were suggesting today the company might be close to announcing a demerger of its retail and telecoms businesses, which could pave the way to such a deal. Last month Morgan Stanley said it would not be surprised if Carphone decided on such a split.
Among the mid caps, software group Misys added 9.25p to 174.25p on vague suggestions of predatory interest.
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