Pub group set for £1.3bn acquisition by Slug & Lettuce owner

The New Inn, Leamington; owned by EI

Slug and Lettuce owner Stonegate Pub Company has agreed to acquire Solihull-based pub operator Ei Group in a £1.3bn deal.

The combined business would operate nearly 5,000 pubs and the deal would make Stonegate the UK’s largest owner of pubs.

It is a transformational deal for Stonegate which launched in 2010 with the acquisition of 333 pubs from Mitchells & Butler. Its brands also include Walkabout and Yates.

EI Group, which used to be called Enterprise Inns, is a former FTSE 100 company that is still part of the FTSE 250.

EI’s chairman Robert Walker said: “The acquisition delivers the future value of the strategy for our shareholders and secures an exciting future for our tenants and employees by creating the leading managed and tenanted pub company in the industry.”

The 285p-per-share cash offer is 38% higher than the share price last night – and nearly four times higher than its value in July 2016.

Walker added: “In 2015 we set out a new strategy. During the past four years we have made great progress in its execution and have delivered a significant increase in value for our shareholders.”

Stonegate’s chairman Ian Payne said: “At Stonegate, we have an established track record of running successful pubs throughout the UK – with over £350m having been spent on capital expenditure at Stonegate since it began trading in November 2010.

“We plan to leverage our existing managed house infrastructure, portfolio of formats and access to capital and invest in the combined estate for the benefit of all stakeholders.”

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