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Mon 4th Sep 2017 - Brewer C&C Group buys minority stake in Admiral Taverns
Brewer C&C Group buys minority stake in Admiral Taverns: Brewer C&C Group has announced that, in partnership with Proprium Capital Partners, it has agreed to acquire the entire issued share capital of Admiral in a deal worth circa £220m The equity investment by C&C is £37m representing 47% of the issued capital of Admiral. The investment will be funded from existing C&C facilities and Admiral will be accounted for as an associate of C&C. C&C believes that the investment will deliver significant economic and route-to-market benefit to its GB businesses through: collaboration with a highly experienced and skilled management team; participation in a resilient and growing earnings stream from a quality, tenanted pub estate; direct access to 845 pubs mainly across England and Wales, through a procurement and supply agreement; mid-single digit earnings accretion and attractive returns on equity in the first full financial year following completion; and a long term commitment from our partners to develop the business. Admiral currently owns and operates 845 pubs, mainly in England and Wales, with a broad geographic distribution. The pubs are 95% freehold or long leasehold, in predominantly suburban or city locations and are operated as a tenanted estate. The management team at Admiral will remain invested and continue to lead the business. They are well regarded within the industry and Admiral has won multiple industry awards and has received consistent recognition from its tenants for its forward looking, operational approach. In Admiral’s latest audited accounts for the 52 weeks ended 28 May 2016, the group had underlying Ebitda of £25.2 million and an underlying Ebitda margin of 36.2%. As at 28 May 2016, the gross assets of the Admiral business were £231.8m and the gross property assets were valued at £244.3m. C&C is investing £37m, representing 47% of the issued capital of Admiral. The remaining equity is provided by Proprium Capital Partners and Admiral management. Debt funding for the acquisition is non-recourse to C&C. The investment will be funded from existing C&C facilities. The transaction is subject to FCA approval only and is expected to complete by the end of November 2017.Commenting on the investment, Stephen Glancey, C&C chief executive, said: “The local pub remains at the heart of many suburban and city communities – often the hub of local activity and their economic and social contribution is immeasurable. C&C has a long and successful track-record of supplying and providing financial support to local pubs within the independent free-trade in Scotland and Ireland. In the UK, the tenanted pub model is a key component of the pub industry. When well invested, and with the right operator and product range, it can provide excellent sustainable returns to all participants. Admiral management has a proven track record in balancing these returns with the needs of their tenants and consumers. Today’s new arrangements will enhance choice for both tenants and consumers and provide a platform for further growth at Admiral. For C&C, this is an attractive opportunity to create a new long term investment in the important on-trade channel, without taking significant financial and operational risk. The investment will provide our brands with improved distribution in some of the best community pubs across the UK, with an opportunity to enhance on-trade penetration further over time.” Chief executive of Admiral Taverns, Kevin Georgel said: “Recent years have seen Admiral Taverns go from strength to strength and I am delighted that with the support of our new investors we will have the platform in place to continue our development and execute our growth plans. Today, our nationwide estate of community pubs showcases the supported-tied model at its best. Through our distinct and award winning operational approach, our dedicated and passionate team have worked hard to build strong and enduring relationships with our licensees. Our strategy remains unapologetically consistent and I look forward to working with the support of our new investors to continue to build on the significant progress the business has made over the last five years and take advantage of the opportunities within our markets, as and when they arise.” Sapient Corporate Finance advised Admiral Taverns previous owner Cerberus on the deal.

McDonald’s staff to strike today: McDonald’s faces its first strike since it opened in the UK in 1974, as well as protests by unions and the public at several restaurants over pay and working conditions. About 40 staff will go on strike on Monday at two restaurants in Cambridge and Crayford, south-east London, after a ballot in favour of industrial action amid concerns over low wages and the use of zero-hours contracts. The fast-food chain has been one of the biggest users of zero-hours contracts in Britain, although it has recently started offering workers the option of moving to fixed hours. The Bakers, Food and Allied Workers Union, one of Britain’s oldest trade unions, said staff were demanding a wage of at least £10 an hour, more secure working hours and union recognition. The strike has been backed by Jeremy Corbyn. In a statement, the Labour leader said: “Our party offers support and solidarity to the brave McDonald’s workers, who are making history today. They are standing up for workers’ rights by leading the first ever strike at McDonald’s in the UK. Their demands – an end to zero-hours contracts by the end of the year, union recognition and a £10 per hour minimum wage – are just, and should be met.” McDonald’s said those taking action represented 0.01% of its UK workforce and said the dispute was related to its internal grievance procedures. Staff in Cambridge and Crayford will mount early morning picket lines before attending a rally in Westminster. The company said all its 115,000 staff in the UK, where it has 1,249 restaurants, would be offered the option of taking a contract with guaranteed hours by the end of the year. It said so far 86% of employees had chosen to stay on flexible contracts. More than 100 union and Labour party members along with McDonald’s workers protested outside the company’s headquarters in East Finchley, London, on Saturday. The company was expecting further “solidarity protests” outside several restaurants on Monday, but stressed that if they did not involve employees, its outlets would stay open. Ian Hodson, BFAWU’s national president, told the Guardian: “This is the second-largest restaurant company in the world that makes $22bn (£17bn) revenues a year, and yet its workers are living in poverty. They have been the pioneers of zero-hours contracts.” He said McDonald’s had started offering some staff the option of moving on to guaranteed-hours contracts two weeks ago. Hodson said the strike might spread. “McDonald’s has had countless opportunities to resolve grievances by offering workers a fair wage and acceptable working conditions. This is a call for change. For far too long, workers in fast food restaurants such as McDonald’s have had to deal with poor working conditions, drastic cuts to employee hours, and even bullying in the workplace – viewed by many as a punishment for joining a union.”

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