Davidson Kempner has clinched a £348m deal to buy a 370-strong pub portfolio from Ei Group.
The board of the largest owner and operator of pubs in the UK said that it has entered into sale agreement with Tavern Propco – a newly incorporated private company owned, through intermediate holding companies, by investment funds managed and/or advised by Davidson Kempner Capital Management.
The disposal comprised the majority of the group’s commercial properties division, which had 412 assets in 2018.
It was part of Ei Group’s focus on its free-of-tie commercial assets, and, in a statement this morning, said its “ability to add further value to the portfolio is low” due to the limited influence it has in the operation of these pubs.
Proceeds from the sale will be used to reduce the level of the company’s outstanding debt and help deliver its target leverage ratio of six times net debt to EBITDA.
Simon Townsend, chief executive of Ei Group, said: “The portfolio is comprised of high quality assets which we believe are best suited to a free-of-tie, rent-only business model. Throughout the sale process, we have been impressed with the commitment and speed of execution demonstrated by Davidson Kempner, a global institutional investment management firm with over $31bn in assets under management and a long track record of investing in real estate.”
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