Six Continents, the UK pubs and hotel business that this week announced plans to split its business into two separately listed operations, is likely to be the subject of a takeover bid from Sun Capital Partners, the investment vehicle controlled by Hugh Osmond.
Sun Capital Partners announced this morning to the London Stock Exchange that it was considering a takeover offer for the FTSE 100 company. The offer would value the business at around £4.5bn.
Newspaper reports suggest that Hugh Osmond, who was linked with a bid for PAI Management target Pizza Express late last year, has approached a number of big buyout firms including Kohlberg Kravis Roberts (KKR), to assist in financing the deal. A spokesperson for KKR declined to comment.
Six Continents is the world’s biggest hotel group, and operates the Inter-Continental, Crowne Plaza and Holiday Inn hotels as well as about 2,000 pubs and restaurants including O’Neill’s and All Bar One.
Sun Capital Partners, through UK-listed cash shell Capital Management and Investment, last week bought 2.6m shares in Six Continents at around 536 pence per share. At the beginning of the week, Six Continents announced that it would split its business into two operations, InterContinental Hotels Group, a hotel group with over half a million rooms worldwide, and Mitchells & Butler, a pubs, bars and restaurants group with annual sales of £1.5bn. Completion of the demerger is scheduled for April.
Hugh Osmond’s interest in Six Continents is thought to centre on the Mitchells & Butler business, although it could face competition from UK private equity firm Cinven.
The Times reports that Roger Carr, chairman-designate of Mitchells & Butler, is a senior adviser to KKR.