UK: Mitchells & Butlers sells off drinks pubs
Mitchells & Butlers calls last orders at drinks-led pubs
Mitchells & Butlers has agreed to sell off more than 300 pubs for GBP373m (US$582m) in order to cut its reliance on dwindling on-trade drinks sales in the UK.
Private equity-controlled Stonegate Pub Co has agreed to buy the 330 pubs, Mitchells & Butlers (M&B) said today (20 August). The deal means that M&B has raised GBP500m from recent asset disposals, which also include its Hollywood Bowl entertainment business.
M&B plans to to invest the proceeds to improve its network of pubs that serve food. A consumer shift to the off-trade means that pubs are increasingly reliant on food sales to substitute lost income in drinks.
"We are pleased that we have been able to announce the exit from our price sensitive drinks-led pubs and our late night venues in a single transaction," said M&B's CEO, Adam Fowle.
"This disposal, when combined with the sale of our lodge and bowling businesses, completes the first stage of our strategy. This will now enable us to reinvest in the informal eating out market where our market leading brands, corporate scale and operational capability will deliver attractive growth and investment returns for our shareholders."
Following the sale, M&B will have 1,580 restaurants and food-led pubs "with higher growth potential", said the firm. These pubs have collectively increase sales and operating profits by 1% and 3% per year respectively since 2007, it added.
M&B announced its plan to sell off more than 300 drinks-led pubs in March. Stonegate Pub Co is owned by TDR Capital.
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