Channel Islands-based consumer and leisure conglomerate C.I. has agreed to the sale of its 82%-owned UK tenanted pubs operation to Punch Taverns for £26.1m in cash. Conquest Inns Limited operates an estate of 61 public houses in London, the South East and East Anglia and made pre-tax profits of £1.1m in the year to January 2002, after £1 million of interest charges. Net assets acquired totalled £18m. C.I., part of a three-way merger with Ann Street Group and Le Riche last September, will use its £23m windfall primarily to reduce debt. Company executive chairman Tom Scott commented that 'whilst we remain committed to the pub business, I believe that we have received a good price'. C.I. still owns pubs, restaurants and hotels on the Channel Islands through the Ann Street part of the business. It also has retail, consumer finance, wholesale and production arms, with interests in the UK and France as well as on the islands. The company has admitted that £4 m of 'exceptional costs' will appear in its accounts for the year to February as a result of its merger but, excluding this, house broker Collins Stewart forecasts £15.6m in pre-tax profits, with 5.3p of earnings per share and 3p in dividends. At the moment there is no compelling reason to buy in.