Following press speculation, pub group Marston’s confirmed on Friday that it has received an “unsolicited” takeover approach from US private equity firm Platinum Equity Advisors.
The firm stated that it was evaluating the proposal with its advisers and a further announcement would be made in due course. Financial details weren’t revealed with Marston’s stating that there was “no certainty that any firm offer will be made”.
With its business hit hard by the shutdown of the hospitality sector for much of the last year, Marston’s share price has languished close to a 20-year low. It jumped nearly 20% on the potential takeover news but the company remains relatively cheap compared to this time last year. At closing prices on Thursday, Marston’s was valued at about £473m.
Marston’s operates around 1,350 pubs and warned towards the end of last year that over 2,000 jobs were at risk due to the pandemic-related disruption in the sector.
Results for the 13 weeks to 2 January show Marston’s pubs generated sales of just £54m. That compared to £1.17bn during the whole of 2019.
The company stated last month that it had the financial headroom to weather the current trading restrictions with its new brewing joint venture with Carlsberg helping strengthen its balance sheet.
Should Platinum’s bid be successful, Marston’s would become the latest in a string of British pub groups to be taken private in recent years. In 2019, Ei Group was bought by the private equity firm TDR Capital in a £3bn deal, while Greene King was acquired by the Hong Kong billionaire Victor Li for £4.6bn.
Whilst repeated lockdowns having decimated trade, pub groups are still considered to be good long-term investments, particularly those that have a large portfolio of freehold assets.
NAM Implications:
- But one of many inevitabilities in the hospitality pipeline.
- Best anticipate more of the same…
- …as PE involvement accelerates a resizing of the sector.
