(Alliance News) - Moody's Investors Service on Monday said it placed under review for downgrade the B1 corporate family rating and the B1 rating of Ei Group PLC's GBP275 million senior secured
bond due in 2031.
The outlook has also been changed to Ratings Under Review from Stable.
The review follows the announcement that pub company Ei Group and Stonegate Pub Co Bidco Ltd, a wholly-owned subsidiary of Stonegate Pub Co Ltd, have reached an agreement on acquisition of the entire share capital of Ei Group for GBP1.3 billion.
The implied enterprise value of GBP2.97 billion is a multiple of 11.4 times Ei Group's underlying earnings before interest, taxes, depreciation, and amortization of GBP261 million for the year to the end of September 30, adjusted for the disposal of 370 commercial properties.
The acquisition is expected to become effective in the first quarter of 2020. Upon completion of the acquisition, EIG's ratings will be aligned with the rating of Stonegate, Moody's said.
The acquisition will trigger a mandatory redemption of Ei Group's corporate bonds including the B1 rated GBP275 million senior secured bond due in 2031.
The ratings agency said the review, which its expects to be resolved by the first quarter of 2020, will focus on the combined entity's business profile, strategy, financial policies, leverage and free cash flow.
Ei Group shares closed 0.2% lower in London at 283.78 pence each on Monday.
