Tchenguiz to net Yates in £200m merger deal
by The PMA Team
Laurel owner Robert Tchenguiz is set to take over rival bar company Yates for £200m.
The Morning Advertiser understands that Tchenguiz has been talking to Yates owner GI Partners for a couple of months about the deal.
The takeover of Yates would create one of the largest highstreet companies in the sector, with an estate of 320 venues.
The £200m offer would mean a £40m profit for GI Partners on the £40m equity investment it made in Yates when it went private last summer. Yates management owns 20% of the equityin the company with chief executive Mark Jones set for apersonal profit of more than £2m.
One industry expert said: "It's a very good deal for everybody. Laurel is a perfect partner for Yates and would significantly reduce competition on the high street."
Tchenguiz operates a classic operating company/property company model, which seeks to create value in two ring-fenced areas. He can create profits for his property company by selling and leasing back his freehold assets. In the meantime, his operating company, Laurel itself becomes a profit centre too.
One source said: "He hardly says a word at meetings but there's no doubting his genius. Nobody understands property like Robert Tchenguiz does. And nobody should underestimate his ability to make money out of the high-street businesses he's buying."
The enlarged Laurel would continue to be run by chief executive Julian Sargeson and chairman Chris Hutt. A question mark hangs over whether the enlarged company will be based at Laurel's Luton headquarters or Yates' base in Bolton.
The combined 320-strong Laurel business post-acquisition will have an Ebitda of around £50m (£17m at Laurel, £27m at Yates and synergies of around £6m) for a total acquisition price of £369m, a multiple of about 7.38 earnings.
Tchenguiz is also bidding for parts of SFI Group.
An industry expert said: "There is a double benefit for Tchenguiz in buying Yates. It makes little sense for two buyers with similar business plans to be chasing the same assets. More-over Yates and Laurel are a pretty perfect fit.
It is believed that Mark Jones and Colin Rawlinson will join GI Partners and look for other private-equity opportunities in the leisure and licensed retail sector.
