City Pub Group’s acquisition of stakes in two high quality and complimentary businesses, pave the way for full control in the future, according to analysts Liberum.

The group announced yesterday (29 April) that is was paying £0.75m to acquire a 49% stake in a landmark pub in Ladbroke Grove – the Kensington Park Hotel, as well as £1.2m to increase its stake in Mosaic Pub & Dining to 24%, through the acquisition of shares in The Galaxy (City) Pub Company, The Pioneer (City) Pub Company and The Sovereign (City) Pub Company.

The company acquired a 14% stake in the Mosaic companies in September 2020 and this transaction takes its total investment to £2.42m.

The note from Liberum said it viewed the new stakes, and the acquisition of shares in Mosaic last year, “as effectively a c£3.2m down payment on £20m+ worth of freehold assets”.

“This is illustrative of the acquisition opportunities ahead which, combined with cost cutting show a pathway for EBITDA to double to +£20m,” it said.

“Following on from its initial £1.2m/14% investment last September, City Pubs has paid a further £1.18m to take this up to 24%. This provides a pathway for full control in due course as EIS shareholders look to liquidate their positions,” said Liberum.