Deal to secure Sydney bars after Keystone Hospitality collapse

The future of some of Sydney’s best known restaurants and bars now secure but Jamie’s Italian still seeks buyer.

Bungalow 8 in Sydney

The future of some of Sydney’s best known restaurants and bars is more certain after a hospitality outfit led by businessman Bruce Dixon struck a deal to acquire the bulk of the collapsed Keystone Hospitality.

Dixon Hospitality will take control of Bungalow 8, The Loft, Cargo Bar, The Winery, The Rook, Kingsleys Woolloomooloo, Manly Wine and Chophouse Sydney as part of the deal which leaves arguably the best known of Keystone’s brands — Jamie’s Italian — still searching for a buyer.

Keystone collapsed in June after it was unable to reach agreement with its lending syndicate made up of private equity outfits KKR and Olympus Capital.

It was earlier rumoured that casino operator Star Entertainment was an interested bidder for the Keystone business, while there was some interest from Fratelli Fresh owners Urban Purveyor Group for parts of the portfolio.

Mr Dixon said the company had been focused on growing in Melbourne, but this deal — for an undisclosed amount — would “see us secure some great venues that are profitable, well-regarded and that represent very good value for our shareholders”.

Jamie's Italian on Pitt Street in the Sydney CBD.

“The acquisition is moving quickly so that we can retain some of the great Keystone staff and get service, quality and capital investment in place so venues are operating at their full potential,” he said.

Ferrier Hodgson receiver Morgan Kelly said negotiations for the sale of the remaining venues were at the final stages.

“Through the competitive bid process run by CBRE Hotels, it became clear that prospective buyers were most interested in specific venues that strategically aligned with their own businesses,” Mr Kelly said.

“The businesses are all continuing to operate on a business as usual basis.”