Sun 24th Mar 2024 - Sovereign wealth funds and family offices circle The Ivy, Whitbread pub package up for sale, Loungers Man City owner Sheikh Mansour circles The Ivy: At least ten sovereign wealth funds and family offices registered interest when serial sector investor Richard Caring kicked off the £1bn sale of his The Ivy Collection business earlier this year. The Sunday Times reports that City sources said that suitors include the Abu Dhabi Investment Authority and Mubadala, the UAE fund controlled by Manchester City football club owner Sheikh Mansour bin Zayed al-Nahyan. Saudi Arabia’s Public Investment Fund is not in the running, the sources added. HSBC is overseeing the sale of Troia (The Ivy Collection’s parent company). Caring, who declined to comment on the sale, has a 50% financial interest, with the other half being owned by Sheikh Hamad bin Jassim bin Jaber al-Thani, the former prime minister of Qatar, otherwise known as HBJ. Caring claims to have full management of the group, however. The plan is to whittle bidders down to a handful of serious names by the end of April, and to finalise the sale by the end of June, although the timetable could slip. Caring will not let go of The Ivy and the rest of the Troia brands completely, however. It is expected that 75% of the group will be sold – HBJ’s 50% stake and half of Caring’s stake – leaving the Briton with 25%. Other options could be considered. Cynics say getting to the magic £1bn figure is a stretch. But sources close to the sales process point to the financial success of Troia in recent years against the odds. The company made £55m in Ebitda in 2022. The returns in 2023 are being finalised and are claimed by insiders to be even better. Meanwhile, a decision to slow down the rollout of The Ivy Collection has allowed Troia to pay down about £90m of debts owed to HSBC. The business, sources claim, is therefore debt free. Even so, this would indicate a 15 times earnings valuation multiple – significantly more than the nine times that private equity firm Apollo paid for Wagamama owner The Restaurant Group at the end of last year. Expansion in the UK and abroad is indeed being signposted to suitors, according to those close to the sale. In Britain alone, more than 30 areas of “white space” – locations where new Ivy openings could thrive – have been identified. Opportunities are also abound in the Middle East and the US, sources said. Whitbread places Beefeater and Brewer Fayre package on the market: Whitbread is set to sell or convert a third of its Beefeater and Brewers Fayre pubs estate after a private equity swoop collapsed. The FTSE 100 company hired Goldman Sachs last year to explore options for its 400-site food and beverage estate, which is mainly of the two brands. The Sunday Times reports that sources said Whitbread subsequently entered exclusive talks to sell the arm to Platinum Equity, the Beverly Hills buyout fund that tried to acquire pub chain Marston’s in 2021. However, the deal collapsed after the pair failed to agree on a price. Whitbread bosses have now instructed adviser Christie & Co to sell between 30 and 50 of its worst-performing sites, according to City sources. They added that a further 100 pubs and restaurants are expected to be converted into extra hotel rooms for Premier Inns, also part of Whitbread. Most of the pubs in question are situated next to Premier Inns. The company is also understood to be reassessing its options for the remaining 250 sites. Sources close to Whitbread said this weekend that no final decision had been taken on the estate. The company said in October that it was looking at “a range of options to help improve the performance and returns of our food and beverage business, while ensuring that we safeguard the quality experience for our hotel guests, and will provide further updates as we make progress”. Whitbread declined to comment. Platinum Equity did not respond. Reilley – part of our success is never patting ourselves on the back and saying ‘we’ve done it’, eyes Northern Ireland opportunities: Alex Reilley, chairman of café bar operator Loungers, has said that an important element of company’s success was “never patting ourselves on the back and saying ‘we’ve done it’, because the moment you do that, the competition go straight past you”. Talking to The Times, he also refuted the suggestion that “as you get bigger you have to compromise”, asking: “Why would you dilute what makes your business special? I think some businesses in our sector have started taking decisions differently. We don’t subscribe to that at all. As you get bigger, you have to work harder.” Loungers floated on the junior Aim exchange at 200p a share in 2019, yet despite expanding from 146 venues to more than 250 over the intervening period, the share price has increased by an ignominious 8p. Since peaking at £3 during the covid pandemic, the share price has bobbed around the flotation price with very little reference to the company’s market-leading trading and growth track record. Reilley said: “We have over-delivered every time we’ve updated the market. There’s not a tremendous amount more we could have done. We can only control what’s in our control, which means doing what we’re doing but better, and hope that at some stage the market will reflect that in our share price. It’s frustrating. There are levers we can pull to try and stimulate the share price, but the best thing we can do is get our heads down and do what we do. Fundamentally, we do it because we love the business, live and breathe it and love growing it. That’s the big thing we can control. At some stage, we might even get some recognition for it.” Reflecting on whether he consider taking Loungers private if the shares continue to languish, Reilley added: “We’re not actively pursuing any kind of change in our circumstances, but we’re obviously alive to the fact that there are businesses in our sector that have had approaches that have turned their heads. So, we’ll just continue what we’re doing and the rest will play out.” Loungers is targeting opening 35 new venues a year, and to help it find the best sites, Reilley commissioned a piece of research from property consultants that identified 613 sites, including about 60 in Scotland, where Loungers has yet to open. He is eyeing another 20 to 30 opportunities in Northern Ireland. Loungers features in the Propel Turnover & Profits Blue Book. Its turnover of £283,500,000 for the year to 16 April 2023 is the 42nd highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.