Yates directors approve share plan to go private

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Independent directors at Yates Group have given the green light for a management buyout of the business, backed by a Californian private equity...

Independent directors at Yates Group have given the green light for a management buyout of the business, backed by a Californian private equity group.

If shareholders approve the offer of 140p per share, which values the group at around £93m, the business will be taken private.

The team of independent directors - those members of the board who are not involved in the day-to-day running of the business - of Mike Hennessy, Christopher Fisher and James Kerr-Muir, announced the decision as Yates unveiled full-year results up to April.

The offer comes at a 36.6 per cent premium over the mid-market price of Yates shares (102.5p) on June 2, the last dealing date prior to the start of the "offer period".

The management team, led by chief executive Mark Jones, and US private equity group GI Partners have formed Thorium for the purposes of the takeover.

If the takeover bid is successful the management team will acquire an 18.25 per cent stake in Thorium and stand to make a substantial amount of money if they complete the turnaround of the business. The management buyout team comprises seven directors.

Mr Hennessy, chairman, said: "Much has been achieved at Yates in the last three years. However, high streets have become populated with bars and the sector is now intensely competitive.

"The independent directors therefore believe the offer represents an attractive price, given the strategic and operational position of the group, its financial performance and its prospects."

Thorium is being advised by Cazenove while Yates is being advised by Close Brothers Corporate Finance. The offer document will be posted to shareholders, who will have 42 days to respond.

Mr Jones said: "GI Partners will take a five year view, which is a much longer-term position than the City, which is extremely short term, especially in the current market."

For the year, the group revealed profits were up 6.5 per cent to £10.6m on sales down 1.2 per cent to £151.3m. Like-for-like sales in the Yates brand were down 3.9 per cent, although sales from refurbished sites were up 1.6 per cent. And like-for-like sales in Yates' Ha! Ha! Bar & Canteen were up 3.2 per cent.

Pictured: Yates Group financial director Steven Fowler and chief executive Mark Jones.

Related articles:

GI Partners to table £93.4m Yates bid (7 June 2004)

Yates in talks on management buy-out (3 June 2004)