By Ian Neubauer
The Empire Beer Group has agreed to sell its two leasehold businesses — The Royal on the Waterfront in East Perth and the Colonial Brewing Company in Margaret River — to the Colonial Leisure Group for just under $4.5 million.
The agreement follows an internal review of the company’s assets and overall strategic direction that concluded with the board realising its attempt to establish a multi-venue hospitality operation had not been successful.
“Over the past 18 months, the board have reviewed numerous proposals for stand-alone and multi-site venues with a view to distributing the Colonial brand and beer products through such venues,” said Empire chairman, Mel Ashton, in a statement to the Australian Stock Exchange.
“Unfortunately the board has been unable to reach terms with vendors which represented value and were satisfactory to Empire… As a result, Empire’s strategy of creating economies of scale through establishing a multi-venue hospitality operation has not been achieved.”
Ashton added that the deal would allow Empire to refocus its efforts on providing shareholder value and review other opportunities
A general meeting of shareholders will be called to approve the sale agreement, with settlement expected in the first half of October.
Empire Beer Group shares have depreciated five cents over the past four weeks and were trading for 6.5 cents at 2:00pm today (August 13).