Slug & Lettuce owner to buy Enterprise Inns for £3bn

Pub group Stonegate, which owns Be At One and Slug & Lettuce, has bought out the Ei Group in a deal worth £3 billion.

The takeover would mean that Stonegate Pub Group takes ownership of Ei’s 4,000-strong pub estate, adding to its current portfolio of 765 sites, which includes bar chains Yates and Walkabout. The pub company has offered all-cash terms, valuing Ei’s shares at £1.3 billion, making the deal itself worth £3 billion including debt.

The deal will make Stonegate the largest pub owner in the UK by a wide margin.

However, the companies agreed that terms would be altered if the Competition Markets Authority requires more than 100 pubs to be offloaded, according to a statement.

The acquisition is expected to come into effect in early 2020.

Ei Group chairman Robert Walker said there were “compelling” commercial reasons for the deal on both sides.

“Stonegate is committed to continuing to invest in the business for the future benefit of the combined business, tenants and employees,” he said in a statement.

“The EIG Board believes that this is a combination it can recommend with confidence to shareholders and stakeholders alike.”

Stonegate believes it would be “better positioned to compete effectively in what is expected to be a challenging operating environment for the foreseeable future, given rising costs, regulatory changes and intensified competition across the sector.”

Ian Payne, Stonegate’s chairman, said the deal “is an exciting prospect to bring EIG and Stonegate together to create a diversified pubs group with significant industry expertise.”

“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.”

“We look forward to working with EIG and its publicans to support future growth and create stronger pubs at the heart of communities across the UK.”