31 March 2004
Legal & General Ventures ("LGV"), the UK private equity firm, today announces that Enterprise Inns plc ("Enterprise") has acquired the 83.2% equity stake in the Unique Pub Company ("the Company") held by a private equity consortium comprising Legal & General Ventures, Cinven and Princes Gate Investors ("the Private Equity Consortium") for a consideration of approximately £609 million.
Enterprise Inns has acquired the stake through the exercise of a call option over the Private Equity Consortium’s shares. The Private Equity Consortium has now wholly exited from the Unique Pub Company and no longer has any interest in the Company’s shares. Morgan Stanley provided advice in relation to the call option held by Enterprise Inns.
In March 2002, the Private Equity Consortium joined together with Enterprise to purchase the combined estates of the Unique and Voyager pub estates. Enterprise acquired a 16.8% stake in the Company and agreed a call option over the Private Equity Consortium’s shares as part of the transaction. The total enterprise value of the acquisition of the Unique and Voyager pub estates from Nomura International plc was £2,013 million.
Since acquisition, the operations of the two estates have been merged and an acceleration of the lease conversion programme of Voyager’s estate undertaken. The combined Unique and Voyager estate was the subject of a successful additional securitisation programme which raised £855 million. Following this securitisation, capital was returned to the Private Equity Consortium and the terms of the call option altered to reflect this return of capital.
LGV’s relationship with Enterprise goes back to 1990 when LGV first supported the development of a new pub company to capitalise on the pubs made available by the brewers following the 1989 Beer Orders. That company was led by Chief Executive, Ted Tuppen and Finance Director, David George, who remain at the helm of the Enterprise business today. Having realised its investment following the successful flotation of Enterprise in 1995, LGV joined forces with Enterprise again in 2002. Enterprise is now the largest pub owning company in the UK and has recently entered the FTSE 100 Index.
Bill Priestley, Director of LGV, said today:"This has been a highly successful investment for LGV which has resulted in a return of almost twice our invested capital. Our knowledge of the pub sector identified the Unique and Voyager businesses as attractive assets to own and this has been borne out by a consistently strong trading performance. LGV has a history of backing good management teams and working with trade partners and the Enterprise story exemplifies this strategy."
