ADVERTISEMENT

Slug & Lettuce Owner TDR Weighs Takeover of EI Group

Slug & Lettuce Owner TDR Weighs Takeover of EI Group

(Bloomberg) -- TDR Capital, the private equity firm that owns the Stonegate Pub Co., agreed to buy the U.K.’s EI Group Plc for about 1.3 billion pounds ($1.6 billion) in cash.

EI Group holders will get 285 pence a share, Stonegate said in a statement. That’s a 38% premium to Wednesday’s close. The stock surged as much as 40% to 289 pence in London trading on Thursday after Bloomberg reported the takeover talks.

The combination makes strategic sense because the two companies have complementary portfolios and skills, EI Group Chairman Robert Walker said in the statement. TDR’s pubs include the Slug & Lettuce, Yates and Walkabout chains. The deal is the second take-private for London-based TDR in a month after it agreed to buy U.K. online used-car seller BCA Marketplace Plc at the end of June.

Private equity firms are scoping out opportunities to buy out publicly held companies in the country after concerns about Brexit led to a slow start to the year. June was the busiest month for private equity buyouts of publicly traded U.K. companies in more than a decade, with $9.8 billion of announced deals, according to data compiled by Bloomberg.

The board of EI Group, which owns more than 4,400 British pubs, endorsed the transaction. Shares of the West Midlands-based company have gained about 32% in the past year.

EI Group leases, owns and manages pubs and has property assets valued at about 3.6 billion pounds, according to its website. The company had net debt of 2 billion pounds at the end of 2018, according to its annual report.

TDR established Stonegate in 2010 to buy 333 pubs from Mitchells & Butlers Plc and has since more than doubled its size through acquisitions, according to its website.

Nomura Holdings Inc., Goldman Sachs Group Inc. and Barclays Plc advised TDR’s Stonegate on the transaction. Deutsche Bank AG and Rothschild & Co. were financial advisers to EI Group.

--With assistance from Ruth David.

To contact the reporters on this story: Sarah Syed in London at ssyed35@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.net;Aaron Kirchfeld in London at akirchfeld@bloomberg.net;Kiel Porter in Chicago at kporter17@bloomberg.net

To contact the editors responsible for this story: Dinesh Nair at dnair5@bloomberg.net, Marthe Fourcade, Eric Pfanner

©2019 Bloomberg L.P.