UK: Greene King agrees to offload 275 pubs
Greene King is looking to eventually cut its estate of pubs to 750
Greene King has agreed to sell 275 of its “non-core” on-trade outlets in the UK for GBP75.6m (US$127.7m).
The Suffolk-based brewer and pub operator is offloading the sites to new pub company Hawthorn Leisure Ltd, it said today (1 May). The deal is expected to complete by early next month.
Greene King's beers will continue to be sold at the outlets as it has agreed a three-year supply deal with Hawthorn.
The sale is part of a plan, announced by Greene King in 2010, to cut its tenanted and leased estate to 1,200 sites. However, it said today it now expects to cut the estate further, to around 750 outlets, to focus on "higher growth areas".
Rooney Anand, Greene King's CEO, said the company has “several options” for the funds raised from the sale.
"Depending on site availability and attractive valuations, our first priority will be to seek to further accelerate our retail expansion plans," he said. "In the absence of increased investment opportunities, we would also retain the option of using the funds to reduce our overall longer-term gearing position.”
Hawthorn's backers are Avenue Capital Group and May Capital LLP.
UK on-trade beer sales fell by 4.2% in the first three months of this year, the British Beer & Pub Association reported yesterday.
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