Mitchells & Butlers buys Ha Ha Bar & Grill for £19.5m

In a surprise move Mitchells & Butlers (M&B) has snapped up the Ha Ha Bar & Grill chain from Bay Restaurant Group for £19.5m.

The deal will see 12 of the food-led chain's leasehold sites eventually converted into All Bar One bars, six into Browns restaurants and the remaining four operating as other, as yet unspecified M&B brands.

In a statement M&B said it expected the deal to offer an earnings before interest, tax, depreciation and amortisation (EBITDA) return of approximately 25 per cent after incremental capital expenditure of £8.5m.

Adam Fowle, M&B's chief executive, said that while small, the acquisition "illustrates our ability and our strategy to develop sites to create value for Mitchells & Butlers shareholders.

"It will also provide an excellent opportunity to grow significantly two strong brands, All Bar One and Browns."

Ian Payne, chairman of Bay Restaurant Group, said his business would now focus solely on La Tasca, its tapas restaurant operation.

"The sale of Ha Ha follows a successful and active auction process which we launched in April of this year," Payne said in a statement.

"As anticipated, there was significant interest in the Ha Ha brand portfolio and I am delighted to see both the business and all of its employees going to such a good home within the M&B stable where I have every confidence it will flourish."

Though subject to a number of revamps and image overhauls in recent years, Ha Ha Bar & Grill was perceived as a successful brand in the Bay Restaurant group, created out of the ashes of Laurel Pub Company which underwent a pre-pack administration in 2008.