MGPE sheds part of pub portfolio

Morgan Grenfell Private Equity has agreed to sell 439 of the 3000 pubs it bought from Whitbread in March to Enterprise Inns.

Whilst many commentators continue to insert the adjective “beleaguered” in front of the company’s name, Morgan Grenfell Private Equity [MGPE] has successfully partially exited from a recent investment that had those same commentators saying “wrong time, wrong price” at the time.

MGPE had paid Whitbread £1.625bn for the 3000 pubs only a few months ago.

Enterprise, the acquisitive UK pub operator is buying the 439 pubs for £262.5m in cash from the private equity firm, leaving MGPE with just over 2500 properties in its portfolio.

“The disposal represents a first and important step in our strategy to concentrate our resources on unlocking the full potential of our managed and leased operations” said Ian Payne, chief executive of MGPE’s pub business.

In a statement, Enterprise Chairman Hubert Red said that the new pubs would make an “excellent fit” in a portfolio that has already grown from 486 properties in 1995 [when the company listed] to some 2200 before this acquisition. The company predicted that the new properties would generate some £30m annual revenues.

Enterprise has also teamed up with Robert Breare’s Noble House Leisure, which has recently been in the news on account of its ongoing pursuit of UK brewer and pub landlord Wolverhampton & Dudley, to bid for Scottish and Newcastle’s 650 managed pubs it put up for sale in January. The asking price for this portfolio is in the region of £350m.

Enterprise was jointly advised on the MGPE transaction by Deutsche Bank and HSBC, who are also joint corporate brokers to the deal. The acquisition remains conditional upon the approval of Enterprise shareholders at an extraordinary general meeting next month.