Stonegate Pub Company Limited reached agreement to acquire Ei Group plc (LSE:EIG) from Robert Walker, Simon Townsend, Neil Smith, Adam Fowle and Barclays Direct Investing Nominees Limited and other shareholders for £1.2 billion on July 18, 2019. The offer per share is £2.85. Stonegate Pub Company Limited will acquire 437.9 million shares and 0.35 million Share Incentive Plan of Ei Group plc. Stonegate Pub Company Limited will also pay £29.4 million for options of Ei Group plc comprising Employee Share Option Scheme, Save As You Earn Scheme, Deferred Share Award and Long-Term Incentive Plans. If after July 18, 2019, and prior to the effective date, any dividend and/or other distribution and/or other return of value is declared, made or paid in respect of shares of Ei Group plc, Stonegate Pub Company Limited shall be entitled to reduce the amount of consideration payable for such shares of Ei Group plc under the terms of the acquisition by an amount equivalent to such dividend, other distribution or return of value. The deal is a recommended all-cash acquisition. It is intended that the acquisition will be implemented by means of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act. Robert Walker holds 0.5 million shares, Simon Townsend holds 1.4 million shares, Neil Smith holds 0.57 million shares and Adam Fowle holds 0.1 million shares of Ei Group plc. In a related deal, on July 18, 2019, Stonegate Pub Company Limited and Ei Group plc entered into the cooperation agreement, pursuant to which, Stonegate Pub Company Limited and Ei Group plc have, amongst other things, each agreed to cooperate in relation to obtaining any consents, clearances, permissions, waivers and/or approvals as may be necessary, and the making of all filings as may be necessary, from or under the law, regulations or practices applied by any applicable regulatory authority in connection with the acquisition and cooperate in preparing and implementing appropriate proposals in relation to the share plans of Ei Group plc. The cash consideration payable will be financed by a combination of equity to be invested by Stonegate Pub Company Limited and various investment funds managed by TDR Capital LLP (parent of Stonegate Pub Company Limited), committed PIK financing from AlbaCore Partners I ICAV and committed senior and second lien financing from Barclays Bank PLC, Goldman Sachs Bank USA, Nomura International plc, Deutsche Bank AG, London Branch and Lloyds Bank PLC. On October 17, 2019, Stonegate has entered into a second lien facilities agreement between, among others, Barclays Bank PLC, Deutsche Bank AG, London Branch, GLQL S.Á R.L, Goldman Sachs Bank USA, Lloyds Bank plc, Nomura International plc, PSP Investments Credit Europe L.P., TCG BDC, Inc., and TCG BDC II, Inc. as original lenders and Barclays Bank PLC as agent and security agent. In connection with financing a portion of the consideration payable under the acquisition. The transaction is backed by £2.20 billion of senior and second-lien debt facilities, alongside a new £200 million SSRCF. Subject to the scheme becoming effective an application will be made to the London Stock Exchange to cancel the admission to trading of shares of Ei Group plc and to the Financial Conduct Authority for the cancellation of the listing of the shares of Ei Group plc on the official list and re-register it as a private company. It is intended that, with effect from the effective date, each of the non-executive members of the Board of Ei Group plc shall resign from their office as a Director of Ei Group plc. It is expected that the Chief Executive Officer and Chief Financial Officer of Ei Group plc will leave it with effect from the effective date. Stonegate Pub Company Limited has given assurances that the existing employment rights, including pension rights, of the management and employees of Ei Group plc shall be fully safeguarded. Stonegate Pub Company Limited does not expect the acquisition to impact the continued employment of employees at pubs across Ei Group plc's portfolio. Subject to the outcome of the detailed review of the integration of businesses of both Stonegate Pub Company Limited and Ei Group plc, it is possible that there may be a small reduction in the combined group's headcount including in corporate and support functions at Ei Group plc's head office where there is duplication with Stonegate Pub Company Limited's existing functions or where the function was required to support Ei Group plc's public listing. Following the completion of the acquisition, Stonegate Pub Company Limited will consider the migration and rationalization of the combined head office. Stonegate Pub Company Limited has not yet concluded on its preferred outcome. Beyond the ordinary course pub divestments described above, there are no further plans to change the locations of Stonegate Pub Company Limited’s or Ei Group plc’s places of business or redeploy the fixed assets of Ei Group plc. The deal is subject to approval by the court, requisite majorities of the shareholders of of Ei Group plc at the court meeting and of shareholders of Ei Group plc at their general meeting, the requisite European Commission and/or Competition and Markets Authority in the UK's anti-trust clearances being obtained and the receipt of regulatory clearances from the Financial Conduct Authority. The deal is intended to be unanimously recommended by the Board of Ei Group plc. Robert Walker, Simon Townsend, Neil Smith and Adam Fowle who are also the Directors of Ei Group plc have irrevocably undertaken to accept the deal in respect of their own beneficial holdings of, in aggregate, 2.54 million shares of Ei Group plc representing approximately 0.58%. The long stop date is June 15, 2020. On September 12, 2019, The court and the shareholders of Ei Group plc has approved the deal. As announced on December 6, 2019, the Competition and Markets Authority has been investigating the transaction. After completing its initial Phase 1 investigation, the CMA has found that the purchase does not raise competition concerns on a UK-wide basis. The merger will be cleared if local concerns overcome. If proposals are not offered, or do not sufficiently address the issues raised, then the merger will be referred for an in-depth Phase 2 investigation. On December 20, 2019, the CMA considers that there are reasonable grounds for believing that the proposed transaction, might be accepted by the CMA. The CMA now has until February 19, 2020 to decide whether to accept the undertakings, with the possibility to extend this timeframe pursuant to April 17, 2020 if it considers that there are special reasons for doing so. The acquisition is expected to become effective in the first quarter of 2020. As of February 27, 2020, the transaction is expected to close on March 3, 2020. Adrian Fisk, Henry Phillips and Christopher Fincken of Nomura International Plc, James Brodie, Nick Harper and Anthony Gutman of Goldman Sachs International and Neal West, Andrew Richards and Derek Shakespeare of Barclays PLC (LSE:BARC) acted as financial advisors while David Holdsworth, Stuart Boyd, Dipak Bhundia, Paula Riedel and Tim Lowe of Kirkland & Ellis International LLP acted as legal advisors to Stonegate Pub Company Limited and TDR Capital. Charles Wilkinson, Chris Raff and Gillan Wilson of Deutsche Bank AG, London Branch and Sam Green, Edward Duckett and Alex Midgen of N M Rothschild & Sons Limited acted as financial advisors while CMS Cameron McKenna Nabarro Olswang LLP acted as legal advisor and Computershare Investor Services PLC acted as registrar to Ei Group plc. Simon Burrow, Vikki Fabian, Paul Pasalic, and Nick Withers of Shearman & Sterling LLP acted as legal advisors for AlbaCore. Tom Mercer, Tim Rennie, Ross Ollerhead and Karen Davies of Ashurst acted as legal advisors to Nomura International, Goldman Sachs International and Barclays. Stonegate Pub Company Limited completed the acquisition of Ei Group plc (LSE:EIG) from Robert Walker, Simon Townsend, Neil Smith, Adam Fowle and Barclays Direct Investing Nominees Limited and other shareholders on March 3, 2020. Robert Walker, Simon Townsend, Neil Smith, Adam Fowle, Marisa Cassoni, Peter Baguley and Jane Bednall have resigned as directors of Ei Group plc and Ian Payne, Simon Longbottom, David Ross, Brian Magnus and Manjit Dale are appointed as directors of Ei Group plc. Ei Group plc has been delisted on March 3, 2020.