Whitbread will sell or convert one third of its Beefeater pubs and Brewers Fayre estates after a failed private equity deal.
Goldman Sachs was hired by the FTSE 100 firm last year to explore possible options for its 400 food-and-beverage estate which is mainly made up of two brands.
Whitbread, according to sources, entered into exclusive negotiations to sell its pub arm to platinum equity. This is the Beverly Hills buyout firm that attempted to acquire Marston’s Pub Chain in 2021. The deal fell through after the two parties failed to agree on a price.
According to sources in the City, Whitbread has instructed Christie & Co. to sell 30 to 50 of its poorest-performing sites. The sources added that 100 more pubs and restaurant are likely to be converted into additional hotel rooms by Premier Inns. Premier Inns is also part of Whitbread. The majority of pubs are located next to Premier Inns.
It is believed that the company will also be reviewing its options with respect to the remaining 250 properties. Whitbread sources said that this weekend, no decision had been made on the estate.
Whitbread has a history that dates back to nearly 300 years ago, when Samuel Whitbread formed a partnership with Godfrey Shewell and Thomas Shewell. In 2000, after diversifying its business into hotels and coffee with Costa and Premier Inn, the group sold off its brewery division. It also owned David Lloyd Leisure and TGI Fridays in the 2000s.
In 2018, Coca-Cola acquired Costa for £3.9 billion. The group now has only one main asset, Premier Inn. Food and beverage sales for the company total between £700 million and £800 million per year. The group also owns the Cookhouse + Pub, Table Table and Bar + Block.
In October, the company announced that it would be looking at “a variety of options” to improve the performance of its food and beverage business. It also said that they were ensuring the quality of the experience of their hotel guests. They will continue to provide updates as the progress is made.
Whitbread declined comment. Platinum Equity has not responded.