Exclusive – C&C Group to consider sale of stake in Admiral Taverns: Brewer C&C Group is to consider a sale of its 47% stake in Admiral Taverns, the circa 1,600-strong pub company, which recently acquired community pub company Hawthorn in a £222.3m deal, Propel understands. It is understood no formal process has begun for the sale of C&C Group’s stake, which it acquired for £37m in September 2017, but that early discussions have taken place around a possible transaction. It is thought no timescale has been placed on any proposed process. Four years ago, C&C Group announced that, in partnership with US fund Proprium Capital Partners, it had agreed to acquire the entire issued share capital of Admiral in a deal worth circa £220m. C&C said at the time it believed the investment would deliver significant economic and route-to-market benefits to its GB businesses. In April 2018, C&C Group, with support from Anheuser-Busch InBev, acquired Matthew Clark and Bibendum, a deal that diluted some of the benefits of the Admiral stake, which is not thought to be seen by C&C’s shareholders as important to the group’s core business as it was previously. It is thought Proprium owns a slightly bigger stake in the business, with Admiral’s management making up the remainder of the pub operator’s ownership. Although it is thought that Proprium may have first right refusal to acquire C&C’s stake in Admiral, it is not thought it will take this up, but look to work with a new investment partner to continue the growth of the business, which has almost doubled in size over the past four years. Backed by investors Proprium and Magners cider owner C&C Group, Admiral has accelerated its growth strategy to expand its estate of community pubs, including acquiring 150 pubs from Star Pubs & Bars in October 2019 and 137 pubs from Marston’s a month later. Earlier this summer, the Chris Jowsey-led Admiral completed the acquisition of the 674-strong Hawthorn from real estate investment trust NewRiver for £222.3m. Both Admiral Taverns and C&C Group declined to comment.

Updated Premium Database of Multi-Site Companies sent to subscribers: The updated Propel Premium Database of Multi-Site Companies, which is produced in association with Virgate, has now been sent to Premium subscribers. The database contains 74 new companies. This brings the total number of businesses listed up to more than 2,000, running in excess of 60,000 sites. Premium subscribers also received a 6,100-word report on the new additions to the database. The comprehensive database is updated monthly and provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different. Alongside this, Premium subscribers will also receive the third edition of the New Openings Database, which is produced in association with StarStock, on Wednesday (6 October), at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. Premium subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out plus regular video content and regular exclusive columns from Propel insights editor Mark Wingett. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The regular single subscription rate of £395 plus VAT for operators and £495 plus VAT for suppliers remains the same. To subscribe, email jo.charity@propelinfo.com

UKHospitality and BRC call for clarity over a new arbitration system to determine pandemic rent arrears: UKHospitality and the British Retail Consortium (BRC) have written a letter to the government calling for clarity over a new arbitration system to determine pandemic rent arrears. In the letter to business secretary Kwasi Kwarteng and Michael Gove, secretary of state for levelling up, housing and communities, UKHospitality chief executive Kate Nicholls and BRC chief executive Helen Dickinson also express concerns about the government's policy that "those tenants that can pay in full should do so". The letter said the hospitality sector, in particular, “feels there needs to be a re-commitment to the ‘sharing of the burden’, as stated in the ministerial statement on the proposals”. The trade bodies also urged Kwarteng and Gove to introduce “starting point of a 50% write-down of rent arrears” for businesses which have been "severely impacted" by the covid-19 crisis. The trade bodies represent more than six million retail and hospitality workers, accounting for almost 10% of the UK’s annual economic output. The letter states: “The government has taken swift and commendable action on the issue of commercial rents since the start of the pandemic. We fully support the decision to ringfence accrued rent arrears from landlord debt enforcement and to resolve outstanding arrears through a process of binding arbitration. We have been working closely and positively with officials to develop the detail of the arbitration process, and would like to commend the pace of their work and the constructive approach that they have taken. We are aware ministers have yet to announce a final decision on the details of the arbitration process. However, we have a number of concerns about the policy as currently mooted that we feel it necessary to raise before that final decision is made. Government has been clear those tenants that can pay in full should do so. However, interpretation of this statement is key. A tenant’s ability to pay rent arrears will depend on their viability not just at the point of arbitration but over the duration of the period in which they are expected to pay arrears. This must take into account arising liabilities and obligations of the business including reasonable forecasts of turnover and trading conditions. It is vital the criteria considered when determining whether a tenant can pay any rent arrears include any that would cause the tenant to take on further borrowing, restructure, not be able to meet other legal and contractual commitments, or place themselves at risk of insolvency or takeover. This would threaten continued business viability, undermining the stated intention of the process. Furthermore, the ability to pay should consider the extent of damage that the business experienced during the pandemic. We/The hospitality sector, in particular, feel there needs to be a re-commitment to the ‘sharing of the burden’, as stated in the ministerial statement on the proposals. For businesses that have been severely impacted we would propose the new code of practice proposes a starting point of a 50% write-down of rent arrears, subject to the ability to forgive. Officials are considering whether the assessment of viability should be made by an arbitrator. It could considerably speed up the process if the criteria that an arbitrator uses to make that judgement could be published in advance and the government specified that a company’s auditors – where they have them – could make that assessment themselves by signing a declaration as to the scope the company has for making repayments. This would streamline the process for arbitrators by putting the burden of assessing viability on applicants. While we recognise not all businesses use auditors, it could be an option for those applicants that wish to use them. It is vitally important these principles are reflected in the updated code of practice for commercial property relationships. We believe a clear structure in this would create better understanding between tenants and landlords of what their respective likelihood of success would be at arbitration and would drive many more into reaching agreements before the end of March 2022. We understand that no decision has yet been taken about the scope of what businesses may qualify for entering the arbitration process. Broadly, the choice appears to be between a process only open to those businesses that were required to close by law, and one open to businesses if they can demonstrate a significant impact on turnover due to covid. The former has the advantage of simplicity while the latter has the advantage of fairness. We believe that, at a minimum, any business required to close at any point since March 2020 must be eligible to use the arbitration process. However, consideration must be given to those who, either by virtue of their location (eg a pharmacy in a train station), or the nature of their business (eg a supplier to a clothing store), was closed by choice as a result of being unviable during the pandemic. We are open as to how this wider eligibility is defined (a percentage fall in turnover in the period concerned compared with the previous year seems to be the easiest to demonstrate), but it is important these businesses are not unfairly excluded from a process that seeks to ensure the continuation of otherwise viable businesses. We note the proposals currently suggest both parties submit, effectively, their best and final offers to the arbitrator, and then he/she determines which is closest to the principles set out in legislation. If neither meet this criterion, the arbitrator is proposed to be able to draw up their own solution. While we welcome a degree of flexibility for the arbitrator in this context, we are concerned this may inadvertently give arbitrators too much discretion to insert significant clauses into leases that neither side want. For example, it appears possible an arbitrator might be able to require a tenant to stay in occupation of a property for a period to pay off rent arrears when neither they nor the landlord might want them to do so. Instead, we propose arbitrators’ decisions should be confined either to conditions that both landlords and tenants have submitted in their proposals or to ones that both agree to during the arbitration process. We hope the above comments are helpful, and are happy to discuss them with you and with your teams should you wish.” The government announced details of the new rent arbitration system in August, with its implementation expected in March next year.