Texas Hedge Fund To Buy 370 Pubs In the UK

Tavern Propco, a private fund owned by Davidson Kempner Capital Management, has bought 370 pubs and commercial assets from the UK’s largest pub company, a transaction that some analysts are calling “game changing.”

Here’s what we know…

Tavern Propco, a private fund owned by Davidson Kempner Capital Management, has bought 370 pubs and commercial assets from Ei’s portfolio in a £348 million deal that leaves the pub giant with just 42 properties and money to service some of its £2 billion debt.

Tavern Propco, has made a £33.7 million deposit on the sale, which is non-refundable unless the publicly held Ei Group’s shareholders don’t approve the sale.

According to the Ei Group the pending sale of its 370 properties the company to focus on its core operations and its publican partnerships business. Ei’s publican partnership helps find those interested in the pub business participate in an industry they might not be able to afford on their own. Last year, the company held more than 3,100 partnership properties.

In a very British manner, Simon Townsend, Ei’s CEO waxed poetically about the pending deal…

“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 optimizing 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.”

According to the Drinks Business, Anna Barnfather, an analyst at Liberum Capital Limited in London called the deal is a “game changer” allowing the pub operator to quickly cut its total debt and hand money back to shareholders….

Some see England’s pub industry as endangered….

In 2018 England’s Office for National Statistics issued a study that analyzed the performance of the UK’s pub sector and reported that the number of pubs operating in the UK has fallen from around 50,000 in 2008 to roughly 39,000 a decade later.

Banner image credit; iStock-455939119

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