Pub group Young's has agreed to sell 56 of the 63 pubs in its tenanted estate, the Ram Pub Company, to Punch Pubs & Co for £53m.
The group said it would retain the remaining seven pubs for the long term after deciding that the best way to increase value for shareholders was to withdraw from the tenanted model and focus solely on operating a portfolio of predominantly freehold managed pubs and hotels.
The proceeds from the sale will be used to strengthen the company's balance sheet and provide additional capacity for investment in its managed estate, with plans to acquire more predominantly freehold managed pubs. By focusing on its managed house estate, the group said head office costs would be lower.
Completion of the sale is expected to take place on 9 August.
Patrick Dardis, chief executive of Young's, said: "Young's sole focus will now be on operating well-invested and premium managed pubs and hotels. We have a proven history of making attractive returns from investing in high-quality pubs and this disposal will provide us with additional firepower to upgrade our existing pubs and capitalise on attractive acquisition opportunities that may come to the market.
"During lockdown, we invested a total of £17m in improving the pubs in our managed estate and the purchase of two new pubs: Enderby House in Greenwich and Alban's Well in St Albans.
"We are delighted to be welcoming back our customers and are already seeing encouraging trading, despite some restrictions remaining. The board is confident Young's will emerge from the pandemic in a stronger position and is excited about the future of the business."