Pub group Young’s has agreed to sell 56 of the 63 pubs in its Ram Pub Company estate to Punch Pubs and Co for £53m.
The group said it will retain the remaining seven pubs for the long term, after the board decided that the best way to “increase value” for shareholders was to withdraw from the tenanted model and focus “solely” on operating premium, individual, differentiated and predominantly freehold managed pubs and hotels.
Young’s plans to use the net proceeds from the sale to “strengthen the company’s balance sheet” and provide additional capacity for investment in its managed estate.
In addition, Young’s will look to acquire “predominantly freehold managed pubs” and also look to “reduce head office costs” by focussing on its managed house estate.
Patrick Dardis, chief executive of Young’s, said: “We have a proven history of making attractive returns from investing in high-quality pubs and this disposal will provide us with additional firepower to upgrade our existing pubs and capitalise on attractive acquisition opportunities that may come to the market.
“During lockdown, we invested a total of £17M in improving the pubs in our managed estate and the purchase of two new pubs: Enderby House in Greenwich and Alban’s Well in St Albans.”
He added: “We are delighted to be welcoming back our customers and are already seeing encouraging trading, despite some restrictions remaining. The board is confident Young’s will emerge from the pandemic in a stronger position and is excited about the future of the business.”