Sir John Ritblat is teaming up with Robert Breare, the leisure entrepreneur, to create a £200m pub business, The Times reports.

The pair are buying Merchant Inns, a fledgling chain of five pubs chaired by Breare, to create a vehicle to develop a chain of at least 50 pubs with accommodation and meeting facilities.

The deal values Merchant Inns at about £11m, including debt of £10m.

The duo are putting in an initial £1m of equity, although Ritblat is also thought to be supplying several million pounds of mezzanine finance. He recently provided loans to fund pub acquisitions.

The pair plan 15 new sites a year for the next three years, at an average cost of £4m a site, including redevelopment. ‘In three years’ time this will be a £200m business,’ a source said.