A more than $ 100 million deal to sell some of Melbourne’s oldest and most popular pubs, including the Esplanade Hotel in St Kilda, has collapsed amid economic turmoil triggered by the coronavirus.
The Melbourne-based hotel empire, known as the Sand Hill Road Group, struck a deal in early March to sell a portfolio of pubs to a hotel company backed by Wall Street private equity giant Kohlberg Kravis Roberts.
The sale price – estimated to be well over $ 100 million – included lease rights to eight popular sites, including the Garden State Hotel in the CBD, the Prahran Hotel, the Terminus in Abbotsford and the Richmond The Posty sites. , Bridge Hotel, Holliava and the Richmond Club.
The jewel in the crown was the Esplanade Hotel – A St Kilda landmark and famous live music venue purchased by the band Sand Hill Road in 2017 and restored after years of neglect.
The ads were to be sold to the Australian Venue Company, backed by KKR, but a opt-out clause in the sales contract allowed the company to withdraw from the deal days before settlement, at a time when the COVID-19’s disastrous impact on the country’s hospitality industry has become evident.
The decision to terminate the contract would have coincided with the federal government’s announcement to close all hotels, restaurants and cinemas.
On Friday, a spokeswoman for Australian Venue Company confirmed that the deal fell through.
“In the current environment, Australian Venue Company and the Sand Hill Road Group are focused on their own pubs and teams. Both companies respect each other tremendously and the intention remains to resume discussions once we get through this crisis.” said the spokesperson.
The Sand Hill Road Group was founded by five friends – brothers Andy and Matt Mullins, Andrew Larke, Doug Maskiell and Tom Birch – in 2000 when they first rented Fitzroy’s Commercial Club Hotel. After 20 years of buying, renovating and operating more than a dozen downtown locations, the company appeared to hit solid ground last month.