The largest pub company in the UK, Ei Group, will sell off the lion’s share of its commercial properties to a US hedge fund in a deal worth £348m.
Ei today said it will sell 370 properties to Tavern Propco, a newly-incorporated private fund owned by Davidson Kempner Capital Management.
The pub owner and operator, formerly known as Enterprise Inns, said the money raised will help reduce its debts of £2bn and provide shareholder returns.
The sell-off represents a large chunk of Ei’s current portfolio of 412 commercial properties.
Chief executive Simon Townsend said: “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 optimising 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.”
At the end of September 2018 Ei managed over £3.6bn in property assets across the UK, with underlying profit before tax of £122m.
Ei said it hired Rothschild & Co as sole adviser on the deal, which is valued at 13 times the earnings of the assets.