A planned $100 million sale of The Espy in Melbourne, along with a clutch of other notable Melbourne pubs, has failed amidst the coronavirus pandemic, as reported by The Age on April 11.
The freeze was reconfirmed yesterday (April 28) by prospective buyers Australian Venue Company chief executive Paul Waterson to the Sydney Morning Herald.
“If they are talking about a September reopening for our industry, you tell me whether BHP, Telstra or the Commonwealth Bank could survive zero revenue for six months with essentially 12 hours’ notice. I mean, in any industry, it’s catastrophic,” Waterson said.
Waterson also spoke on the mutual agreement between AVC and the Sand Hill Road group to put the deal on ice. He noted that AVC was “very keen to keep talking with them [Sand Hill Road]” if they remained interested in selling the venues post-pandemic.
In a statement from AVC to NME Australia on April 29, Waterson said, “When it became clear that the venues were closing, we had a discussion with the Sand Hill Road team and we agreed, in the current environment, it just wasn’t the right time to finalise a transaction.”
AVC asserts that “the two companies have enormous respect for one another and the intention remains to pick up discussions again once we are through this crisis”.
“We believe live music is the beating heart of many venues around Melbourne, including a number within our own stable. We are committed to finding ways to support live music and keep this industry alive as we re-open our venues once the lockdown has been lifted.”
The American private equity group Kohlberg Kravis Roberts had backed the Australian Venue Company in early March to ink a $100million-plus deal, intending to acquire the leasehold rights of eight venues from the Sand Hill Road group, including The Espy.
The Espy (more formally known as Hotel Esplanade) is one of Melbourne’s most famed music venues. It was bought by Sand Hill Group in 2017 when it had fallen into disrepair, and reopened the following year.
A “cooling-off clause” in the sale contract provided AVC with the ability to walk away from the deal just days before the settlement, which they did as the economic devastation wrought by the coronavirus pandemic worsened.
On April 10, a spokesperson for AVC confirmed to The Age that the deal had halted.
“In the current environment, both Australian Venue Company and Sand Hill Road group are focused on their own pubs and teams. The two companies have enormous respect for one another and the intention remains to pick up discussions again once we are through this crisis,” the spokesperson said.
The collapse reportedly coincided with the government-mandated closure of pubs, restaurants and cinemas to stem the spread of the coronavirus.
At the time of the original deal, AVC CEO Paul Waterson told NME Australia there are “no plans to change what customers know and love” about The Espy and the other venues it has purchased. Those include the Garden State Hotel, The Posty, Bridge Hotel, Holliava, Richmond Club, the Prahran Hotel and Terminus.