Pub group Mitchells & Butlers (LON:MAB) is set to sell 333 of its non-core pubs for £373m in cash to Stonegate Pub Company Ltd, a company controlled by TDR Capital, the private equity group that started Punch Taverns in 1998. M&B said the sale was in line with its strategy to withdraw from the lower price, drinks-led market and the late night high street bars and venues as announced in March 2010. Once the deal completes, the group will have raised £500m from recent non-core disposals. The shares responded this morning with a rise of 0.7% to 298p.

The pubs in question had attributable EBITDA and operating profit in the 52 weeks ended April 10, 2010 of £52m and £35m respectively. This represents an EBITDA multiple of 7.2x on the gross proceeds. Twenty percent of the pubs are short leasehold generating £8m of EBITDA and £2m of operating profit during the same period.

M&B said it intended to reinvest the proceeds into growth opportunities offered in the informal eating out market where it believes its brands deliver attractive growth prospects. The latest deal will leave it with 1,580 restaurants and food-led pubs with higher growth potential. Each year since 2007 this core business has grown like-for-like sales by around 1% point more than the historically reported M&B results whilst operating profit per pub has increased by 3% per year.

Commenting on the transaction, John Lovering, M&B’s chairman, said: “I am delighted with the progress being made on reshaping Mitchells & Butlers' portfolio in line with the strategy we announced in March. Adam Fowle and the new management team are making excellent progress in accelerating the pace of change throughout the organisation. The cash resources released by the sale programme will allow the company to accelerate its growth into the informal eating out market.”

Chief executive Adam Fowle, said: “We are pleased that we have been able to announce the exit from our price sensitive drinks-led pubs and our late night venues in a single transaction. This disposal, when combined with the sale of our lodge and bowling businesses, completes the first stage of our strategy. This will now enable us to reinvest in the informal eating out market where our market leading brands, corporate scale and operational capability will deliver attractive growth and investment returns for our shareholders.”

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