DealBook: R.B.S. Sells Pub Business to Heineken

Punchbowl LondonThe Punch Bowl in London is part owned by Guy Ritchie, the movie director and Madonna’s ex-husband.

LONDON — The Royal Bank of Scotland announced Friday the sale of its British pub chain to the Dutch brewing giant Heineken for £412 million, or $646 million.

The deal is part of an aggressive sale of noncore assets by the struggling British bank, which is 83 percent own by the government after receiving a £20 billion bailout in 2008.

R.B.S. bought the chain of 918 pubs, known as the Galaxy Pub Estate, in 1999 and 2000, as the bank looked to expand its operations into property to take advantage of rising prices of British commercial real estate. The pubs include the Punch Bowl in Mayfair, an expensive neighborhood in London, which is part owned by Guy Ritchie, the movie director and Madonna’s ex-husband.

With the worsening economic climate, R.B.S. has tried to reduce its exposure to assets that aren’t part of its traditional bank business. As of the end of September, R.B.S said it had reduced the bank’s so-called noncore assets to £105 billion, compared with £258 billion in 2009. The bank says it’s on track to reduce the figure to below £100 billion by the end of the year.

Along with the sale of traditional loan portfolios, including R.B.S.’s aviation financing unit, the bank also has been offloading assets not traditionally associated with a financial institution. In September, R.B.S. announced that it had sold a Hilton hotel property, the five-star Hilton Hotel in Glasgow, for £35.7 million to the property investment firm Topland Group. Earlier this year, the British bank also sold the Priory Group, a chain of care homes and hospitals, to the private equity firm Advent International in a deal worth £925 million.

The disposals haven’t helped to shore up the bank’s stock price. Since the beginning of the year, R.B.S.’s shares have fallen 49 percent, compared with a 9 percent drop for the FTSE 100 index.

RBS Corporate Finance and Sapient Corporate Finance advised R.B.S. on the transaction. Nomura Freshfields advised Heineken.

Article source: http://dealbook.nytimes.com/2011/12/02/r-b-s-sells-pub-business-to-heineken/?partner=rss&emc=rss