Majestic sets August deadline for Lay & Wheeler sale

Majestic Wine’s fine wine division, Lay & Wheeler is likely to be auctioned at the end of the month, as sale attracts ‘a handful’ of private equity bids, sources have reported

According to unconfirmed reports on Sky News, Majestic is seeking final bids for the fine wine business by the end of August, through Cavendish Corporate Finance, who is dealing with the sale. The fine wine division has attracted a number of firm offers primarily from Private Equity, Sky said, and is likely to raise around £10 million.

The 163-year-old fine wine specialist was bought by Majestic for £6 million in 2009 as part of the wine warehouse’s plan to bolster its sales of fine wine. Founded in Colchester by John Lay in 1854, the company passed to Lay’s nephew George Wheeler in the 1890s and remained in Wheeler family hands until it was bought by Majestic.

However, following Naked Wine’s acquisition of Majestic in 2015, the new owners undertook a major ‘”reconfiguration” of the company the following year amid concerns that the division was too dependent on the uncertain en primeur market and the majority of its profit was derived from cellarage. New managing director Katy Keating and head of sales David Payne were brought in to turn the business around, and by 2017 the company reported that Lay and Wheeler was on an upward trend after “years of languishing in the doldrums”.

In June this year, the company saw EBIT grow 22.8%, with higher levels of en primeur shipments boosting revenue growth by 22.7%, and the underlying year-on-year revenue 2.4% higher.

The auction of the fine wine division comes as Majestic is finalising the sale of its UK retail and commercial business, which is expected to be announced over the summer. The business is rumoured to be sold for around £100 million, with Japanese-backed Fortress Investment Group widely rumoured as the front-runner.

Other bidders are said to include Elliott Advisors, who owns UK book shop chain Waterstones and whose parent company invested in Pernod Ricard, and private equity firm OpCapita, the former owner of electronics chain Comet.

However, according to Sky, former Tesco BWS and Berry Bros & Rudd boss Dan Jago is no longer in the running to helm the business, despite being rumoured to be in talks with several bidders.

Majestic first announced it would close and sell stores and rebrand as Naked Wines in order concentrate on its growing online wine subscription service in March. However it later changed tack, responding to media speculation over its intentions by confirming it was exploring a range of options to release capital from the retail and commercial business, including the combined sale of its entire retail and wholesale operations.