CMA could investigate Stonegate's proposed acquisition of EI Group
By Michele Maatouk
Date: Friday 11 Oct 2019
(Sharecast News) - The Competition and Markets Authority said on Friday that it could investigate Stonegate's proposed £1.3bn acquisition of pub chain EI Group.
The competition watchdog said it is considering whether the deal could result in a "substantial lessening" of competition in the UK. It has invited comments on the transaction from any interested party.
EI Group, formerly Enterprise Inns, announced in July that it had agreed to be bought by Slug & Lettuce owner Stonegate for 285p a share in cash. This represents a 38.5% premium to the closing share price before the deal was announced.
EI chairman Robert Walker said at the time that the commercial benefits of combining the two companies were "compelling".
"Stonegate is committed to continuing to invest in the business for the future benefit of the combined business, tenants and employees. The EIG board believes that this is a combination it can recommend with confidence to shareholders and stakeholders alike," he said.
EI owns more than 4,000 pubs across England and Wales and has more than 1,800 employees. Meanwhile, private equity backed Stonegate has more than 765 operating outlets. It began trading back in 2010 following the acquisition of 333 pubs from Mitchells & Butlers.
At 1020 BST, EI shares were up 0.1% at 281.80p.
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