Ei Group plc, the UK's largest owner and operator of pubs, has entered into an agreement to sell 370 sites, subject to shareholder approval, to Tavern Propco Ltd, comprising public houses and other commercial properties, for £348m.
Tavern Propco Ltd is a newly incorporated private company, which is owned by investment funds, advised by Davidson Kempner Capital Management LP.
The sites are made up of a significant proportion of the current Ei Commercial Properties division (FY 2018: 412 properties).
Ei’s strategy in recent years to grow the income and quality of the Commercial Properties portfolio has resulted in what the Board believes to be an attractive valuation for the Portfolio.
Highlights of the disposal:
• A significant proportion of the deal proceeds will be used to reduce the level of the firm’s outstanding debt.
• Along with the accelerated debt reduction, the disposal provides the Board with the opportunity to consider more immediate returns to shareholders.
• The disposal also allows the group flexibility to invest in driving growth in its core Publican Partnerships, Managed Operations and Managed Investments divisions, whilst at the same time identifying properties to rebuild its Commercial Properties division.
Simon Townsend, CEO of Ei Group, said, “We are very pleased to have agreed the sale of the Portfolio, which is in line with our strategy of delivering attractive and sustainable returns to Shareholders by unlocking the embedded value and optimising the returns from every asset within the business.
'The Portfolio is comprised of high quality assets which we believe are best suited to a free-of-tie, rent-only business model.
'Throughout the sale process, we have been impressed with the commitment and speed of execution demonstrated by Davidson Kempner, a global institutional investment management firm with over US $31 billion in assets under management and a long track record of investing in real estate.”
