3DE to be marketed for sale
The board of 3D Entertainment (3DE), the late-night bar and club group, has appointed advisers to launch an official sale of the business, M&C Report understands.
The group, which operates about 60 leasehold clubs including the Chicago Rock Café and Jumpin Jaks formats, has asked the corporate finance arm of Zolfo Cooper to sound out potential buyers.
The business is expected to attract an enterprise value of up to £30m.
An official sale follows reported unsuccessful attempts by the 3DE board to merge with other companies operating in the late-night space, including Regent Inns and Premium Bars & Restaurants.
The business was spun out of Luminar, Britain's biggest nightclub business, in January 2007 in a deal valued at the time at about £95m. It is thought to have a relatively small amount of bank debt — with HBOS — of about £10m, although it also has loan notes of £20m outstanding to Luminar.
As part of the deal to de-merge 3DE, Luminar retained a 49% equity stake in the business, while the management team - led by David Crabtree — acquired 30% while Prestbury, the property group headed by Nick Leslau, took the balance of 21%.
At the time the business comprised close to 100 venues: 54 Chicago Rock Café sites; 14 Jumpin Jaks and a further 30 unbranded outlets that Luminar had deemed "non-core". The subsequent onward sale of packages of sites to Helena Leisure and JD Wetherspoon has seen the estate boiled down to around 60.
Prestbury's involvement stems from a sale-and-leaseback deal executed at the time of the demerger from Luminar. It is thought that the commercial landlord owns between 20 and 30 of the properties operated by 3DE.
Industry observers have suggested that because the Prestbury deal was executed at the top — or near the top — of the property market this part of the estate is likely to be over-rented, in line with other deals struck at the time. It is thought that some of the rents will need rebasing whether the business is sold to a third party or restructured under its current ownership.
Zolfo is thought to be in the process of compiling an information memorandum to circulate to interested parties.
