Oakman contemplates minority stake sell-off
Executive chairman Peter Borg-Neal said with the economic uncertainty in the world, operators needed to be “well capitalised or sell their business”.
He said the group had received one private equity offer for a minority stake, which would allow it to execute its expansion ambitions more quickly.
“We need more money to grow as quickly as we want,” he said. “We have a great pipeline which we can’t quite afford to build out right now. We’re trading well so we want to develop that pipeline.
“I want to hold a bit more cash in the balance sheet, to be a bit more cautious
“The world is an uncertain place and it could get worse. I think it’s a bad time to do what I was doing seven or eight years ago.”
Formation under EIS
Borg-Neal founded the business under the Enterprise Investment Scheme (EIS) with support from friends and family, who have continued to back the company.
The premium managed pub and restaurant group has raised £45m from private individuals since it was founded in 2007, with a third of that raised in in 2021.
“People who were already invested in us it had a lot of loyalty, believed in our management team, followed their money and helped us get through a very difficult year,” he said.
Potential deal
Borg-Neal told delegates he “never meant to go on this long” having traded Oakman for 15 years, and been hit by external events such as the global financial crisis and the pandemic.
Under any potential deal, Borg-Neal said it would most likely be a mixture of equity and debt – but it would have to be right for existing investors.
“The private equity model is a bit like having your cake and eating it,” he added. “Their chunk comes out first. You have to think about how you put the deal together, without making it uncomfortable for people who have already put in a considerable amount of their own money
“But to have someone around boardroom with deep pockets, it might make sense to have that extra firepower.
“We are talking to some interested parties and we have got one offer which we’re working through.”
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