All Bar One: part of pub group

UK pub group Mitchells & Butlers (M&B), in which Irish businessmen John Magnier and JP McManus have a 17.5% stake, is to earn more than €107m from selling the majority of its lodge business and by selling and leasing back eight of its pubs.

The group, which includes pub chains All Bar One and O'Neill's, is selling 2,000 rooms in 52 lodges to Prupim and another property company. The lodges will then be operated as budget Travelodge hotels.

After the transaction, which is expected to complete in August, M&B will have 750 rooms within its portfolio and they will continue to trade under the Innkeeper's Lodge brand name. The rooms being sold had a net book value of €110m. As part of the sale-and-leaseback deal, M&B is being paid nearly €19m but will pay nearly €1.2m a year in rent to operate the restaurants and pubs.

The net proceeds from the deal will be used to fund capital investment and growth in some of M&B's brands. M&B serves around 130 million meals and 575 million drinks each year and its future strategy is to concentrate its focus on food sales.

M&B will make its third-quarter interim management statement later this week.