As previously tipped, Andrew Lloyd Webber’s Really Useful Group (RUG) will sell four of its seven remaining West End theatres to former BBC and ITV chairman Michael Grade. RUG announced today (27 October 2010) that, after an “unsolicited approach” earlier this year, it has reached agreement with GradeLinnit for the sale, which is estimated to be worth £50 million.

The four, mid-sized theatres on the block, amounting to 4,900 seats overall, are: the 1100-seat New London (currently home to War Horse), the 1200-seat Her Majesty’s (The Phantom of the Opera), the 1200-seat Cambridge (Chicago) and the 1400-seat Palace (Priscilla Queen of the Desert). The transaction is expected to close in January 2011.

RUG will retain its two largest musical houses, both circa 2,300 seats – the London Palladium (where Lloyd Webber’s own, TV-cast production of The Wizard of Oz opens in February) and the Theatre Royal Drury Lane (where Oliver! gives way to Shrek in the new year) – as well as its 50% stake in the Adelphi Theatre (home to Lloyd Webber’s Phantom follow-up Love Never Dies), which it co-owns with the US-based Nederlander Group.

Grade and theatrical agent Michael Linnit, partners in GradeLinnit, reportedly made an earlier unsuccessful bid for RUG’s theatres in 2005; they renewed exclusive talks with the company this past summer.

In a press statement, Andrew Lloyd Webber said: “It has been a totally gut-wrenching decision for me to decide to sell the four theatres. However, following my illness last year (when he was diagnosed with prostate cancer), I was advised to reduce the debt in the family company. It is particularly difficult for me as the New London was Cats’ home for 21 years. For nearly 25 years, Her Majesty's has been and still is the home of The Phantom of the Opera. The Palace has huge personal associations and was described by John Betjeman as ‘the only theatre architecture … which climbs into the regions of a work of art’.

“I am particularly proud that, over the 25 years that I have owned the Palace, I have been able to restore the magnificent auditorium and the exterior thereby removing the huge neon advertising hoarding that defaced both the theatre and Cambridge Circus. I have agreed that the purchase price be reduced by £5 million to enable GradeLinnit to invest this sum in the theatres, principally in the Palace. My commitment to composing, producing and theatre ownership remains as strong as ever.”