Yates in talks on management buy-out

Pub operator Yates is in talks with a private bidder backing a possible management buy-out of the business.

Chief executive Mark Jones is leading the management team in talks for a deal which would take the company out of the City spotlight as it works on the revamp of its core Yates's outlets. Yates has confirmed that it has been approached by US-owned private equity fund GI Partners. Negotiations are underway, which "may or may not lead to a recommended offer being made for the company," said Yates.

GI said it is in "advanced discussions" with the company, and that the management team has been given permission by the Yates board to "evaluate the approach made by GI Partners, and the management team is now progressing the MBO opportunity."

Yates has formed a committee of independent directors, including Mike Hennessy, Christopher Fisher and James Kerr-Muir, to negotiate on the company's behalf.

Yates would not comment further on a possible MBO, but said a further announcement would be made when its annual results are published next week. 30 per cent of the business is still in the hands of the Yates family.

Yates's management team is led by Mr Jones and finance director Stevan Fowler. The company operates the Yates's town centre pub chain as well as the more upmarket Ha Ha Bar brand.

In common with other town centre operators, Yates has found the sales environment tough in recent times, and has started a programme of revamping some outlets into a new format, as well as selling off other underperforming pubs.

Sources close to the negotiations told The Publican​ that Yates's management team believes that a buy-out will allow the business the time it needs to bed in a recovery.

"Venture capitalists will take a medium to long-term view of the prospects for the business," said the source, "whereas the City is focused on short-term sales figures and is currently taking a very negative view of the town centre market."