The UK's largest pub chain, Stonegate Group, is reportedly considering a massive sale of more than 1,000 of its establishments. This potential move would see the company, which owns popular brands like Slug & Lettuce and Be At One, relinquish almost a quarter of its entire portfolio.
A Billion-Pound Portfolio on the Line
According to a report from The Times, Stonegate bosses are in talks with potential advisers regarding the future of 1,034 of its so-called "platinum" pubs. This collection of leased and tenanted venues is estimated to have a collective value as high as £1 billion.
The group, which operates 4,300 venues across the country, confirmed it is reviewing options for this portfolio. A company spokesperson stated that possibilities include a refinancing, partial sale, or a full sale of the sites, but emphasised that no final decisions have been made.
Debts and a Previous Attempt
This is not the first time Stonegate has contemplated such a significant divestment. The company attempted a similar sale of around 1,000 pubs in 2023, but the plan was unsuccessful. Following that, the group secured a £638 million loan from private equity house Apollo, using 1,000 venues as collateral.
A key factor enabling the current review is that the non-call period on this Apollo loan, which prevented Stonegate from selling the pubs, is due to end in January.
Stonegate's substantial debt, which exceeds £3 billion, was largely accumulated through its £1.7 billion acquisition of Ei Group in 2019. This deal was completed just months before the COVID-19 pandemic forced widespread pub closures, severely impacting the hospitality sector.
Business as Usual or Strategic Shift?
In a separate move earlier this year, Stonegate placed 23 of its pubs on the market, with estate agents Savills leading the sale. At the time, a spokesperson described this as a "business-as-usual transaction" and part of the company's regular portfolio review.
The news comes as the pub industry continues to navigate a challenging economic climate. In a related development, Wetherspoon chairman Tim Martin recently stated his company would strive to "keep price increases to a minimum" despite rising costs, highlighting the financial pressures facing the entire sector.
