Thursday 18 July 2019 10:28 am

Slug and Lettuce owner Stonegate Pub Company to pay £1.3bn for Ei Group

Slug and Lettuce owner Stonegate Pubs announced this morning it has bought Ei Group, the largest owner and operator of pubs in the UK, for £1.3bn.

Stonegate, which also owns pub chains Walkabout and Yates, will offer 285p in cash for each Ei share, a premium of more than 38 per cent on Wednesday’s close. 

Read more: Pre-booking drives Stonegate Pubs festive sales

The deal values Ei, which owns more than 4,000 pubs, at £2.97bn including debt. 

Ei directors are set to recommend that shareholders vote in favour of the acquisition. 

Ei chairman Robert Walker said the benefits of combining the companies were “compelling.”

“The acquisition delivers the future value of the strategy for our shareholders and secures an exciting future for our tenants and employees by creating the leading managed and tenanted pub company in the industry,” he said. 

In its latest half-year results the pub operator reported pre-tax profits of £59m in the six months to the end of March, up from £57m in the same period last year.

Read more: Revenues up at Slug and Lettuce owner Stonegate Pubs

Stonegate has more than 765 pubs across the UK. It started trading in 2010 following the acquisition of 333 pubs from Mitchells & Butlers. 

Stonegate chairman Ian Payne said: “It is an exciting prospect to bring EIG and Stonegate together to create a diversified pubs group with significant industry experience”.

Image: Getty