Redcape nets entrepreneurs
Pub owner and operator Redcape is on the market and is already drawing interest after investment bank Goldman Sachs sent out flyer documents this month.
Redcape is Australia’s largest independent pub group, owning and operating 26 pubs and associated retail stores.
It was originally envisaged that the business could attract a private equity firm or yield hungry foreign investors that could pay as much as $700 million.
And now, the talk in the market place is that it’s attracted the interest of pub baron Arthur Laundy and Theo Karedis of Theo’s Liquor fame.
Now the Laundy and Karedis family have form in this area. Apart from being among the wealthiest families in Sydney, they have a strong portfolio of hotels including the Sofitel in Noosa, formerly run by the Sheraton, and the iconic Manly Pacific.
But getting into Redcape would change the business completely.
Redcape’s drinking holes are among the highest earning pokies pubs in New South Wales. And that means the Laundy and Karedis families will be competing against cashed up private equity firms and foreign investors to get access to the lucrative pokies market.
Now hotel valuations are soaring at the moment and the real estate market for pubs is in overdrive with all sorts of deals going down.
But the big challenge for any buyer of the business is the fragmented and volatile pokies market with speculation and political pressure for stricter gambling restrictions to be introduced.
That might explain why Coles and Woolworths are in the process of either downsizing or getting out of the sector altogether.
The Redcape saga, which at one stage had the group earmarked for a listing on the Australian Securities Exchange, will continue to attract a lot of interest.
Meanwhile, there’s been talk that US-based hedge funds York Capital and Varde Partners, investment bank Moelis & Co and well-known pub investor Nelson Meers, who had all been looking at getting into Redcape, might be making another run at the business.
by Leon Gettler, September 21st 2016
