Shares in Mitchells & Butlers were down on the FTSE 250 in morning trading after the company announced that it would be selling 333 of its non-core pubs to Stonegate Pub Company Limited for £373 million. Stonegate itself is controlled by TDR Capital LLP.
Mitchells & Butlers said that the sale was in line with its strategy to exit the lower-price drinks-led market and its late night high street bars and venues.
In the year ended 10 April 2010 the pubs being sold made an operating profit of £35 million, while EBITDA was £52 million.
The group said it would be investing the proceeds of the disposal into growing its presence in the eating out market, where it said its leading brands would deliver "attractive growth prospects".
The completion of the disposal is to take place by the middle of November, assuming the deal is approved by shareholders. Once completed, the deal will leave Mitchells & Butlers with 1,580 restaurants and food-led pubs.
Adam Fowle, Chief Executive of Mitchells & Butlers, commented, "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."
By 09:40 shares in Mitchells & Butlers were down 0.95 per cent to 293.00 pence per share.