Lloyds Bank sells 1100 pubs

It seems the UK taxpayer has taken yet another massive hit. On 4 January 2013 Admiral Taverns, one of the UK’s biggest pub groups, has been bought by U.S. based private equity group Cerberus in a fire sale. The Lloyds Banking Group, which had to be bailed out by the UK government to the tune of a 40 percent stake, reportedly received about GBP 50 million in cash for its pubs. Add to that the GBP 150 million that Cerberus took on in debt, the transaction is valued at GBP 200 million (USD 323 million) or a little over GBP 180,000 (USD 290,000) per pub.

The sale takes the leased and tenanted pub operator off the books of Lloyds, three years after it took control in a debt-for-equity deal.

The pub group’s senior management team will stay with the business, it was reported.

Admiral Taverns, based in Chester, was founded in 2003. Having bought up low-value, “wet-led” pub estates, it amassed a portfolio of more than 2,000 pubs, which has been reduced to about 1100 outlets since 2009.

The group was controlled by the property developer Landesberg until 2009 when it fell into administration after it was unable to service more than GBP 850 million (USD 1.4 billion) of debt.

Together with the Royal Bank of Scotland (RBS), Lloyds was one of the UK’s major pub landlords. But following the credit crisis, the government decided to save the RBS and Lloyds by injecting GBP 66 billion (USD 106 billion) into them, and effectively nationalising them. The RBS was the first to sell off its pubs in an effort to reduce non-core assets. A little over a year ago in December 2011, the RBS disposed of 918 pubs to brewer Heineken for GBP 412 million (USD 662 million).

In terms of number of pubs owned, Punch Taverns is still the biggest pub operator in the UK with about 4500 pubs.