Majestic Wine will sell its retail and commercial units to Softbank Group's Fortress Investment for approximately £100 million as it looks to rebrand into a purely online retailer under the Naked Wines name.
The British wine merchant said it will sell the businesses to CF Bacchus Holdings Ltd, a vehicle controlled by funds managed by US-based Fortress.
Majestic has been struggling with competition from discounters, with its high street stores hit by online rivals, and earlier this year faced the abrupt departure of its chairman.
It has been looking to sell businesses to focus on booming Naked Wines, which has doubled in size since Majestic bought it in 2015.
Shares in the AIM-listed company rose as much as 6% after it also said that it had received "significant interest" from multiple bidders for the sale of its specialist fine wine unit Lay and Wheeler.
"I am delighted that we have managed to secure an independent future for both Naked andMajestic Retail and Commercial, allowing both companies to pursue growth," CEO Rowan Gormley said in a statement.
Britain's traditional store groups have been facing challenges from rising property taxes and sluggish consumer spending. Many high street retailers have been forced to close stores and focus on boosting their online presence instead.
"This arrangement allows Naked to focus on its own growth, whilst protecting a still much-loved brand," Nick Carroll, associate director of retail at Mintel said.
Majestic, which opened its first store in 1980, has also been trying to grow its footprint outside Britain ahead of Brexit.
Online sales currently account for about 45% of its business, with about 20% coming from its international operations.
Britain's wine and spirit industry contributes approximately £50 billion to the country's economic activity, according to the Wine and Spirit Trade Association, with about 60% of British adults drinking wine in 2016.
Majestic's sixth-largest shareholder Gatemore Capital Management said it was "excited for the company's prospects going forward as a standalone, high-growth and profitable business".
The firm holds a 3.77% stake in the company, according to Refinitiv Eikon data.
Portfolio Being Sold
The portfolio being sold to Fortress has around 200 retail shops, while the commercial unit supplies wine to businesses. The total consideration is £95 million, with a separate property sale expected to realise a further £5 million.
Majestic, which suspended its dividend earlier this year, said that it will use the net proceeds from the sale to cut debt, invest in its Naked Wines business and return £3.8 million to shareholders.
"This deal highlights significant shareholder value for current holders, but such with all things from this management team, they giveth with one-hand and taketh with the other," Liberum analysts said.
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