Stonegate Group, the owner of Slug & Lettuce and Be At One, is considering selling over 1,000 of its pubs. The pub chain operates 4,300 venues, indicating a potential divestment of nearly a quarter of its establishments. Initial reports from The Times revealed that Stonegate executives have engaged in discussions with potential advisors.
According to sources, approximately 1,034 of its premium pubs, known as “platinum” pubs, could be put up for sale, with an estimated combined worth of £1 billion. Despite generating revenue exceeding £1.7 billion last year, the company is burdened with debts surpassing £3 billion.
Stonegate accumulated a significant portion of its debt following the acquisition of Ei Group in 2019, just prior to the widespread pub closures due to the COVID-19 pandemic.
A spokesperson from Stonegate clarified that while they are exploring various options for the Platinum portfolio, such as refinancing, a partial sale, or a complete divestment of the sites, no final decisions have been made. The company continues to advance its transformation strategy.
In a previous attempt in 2023, Stonegate failed to sell a similar number of pubs. Subsequently, the pub group refinanced 1,000 venues with a £638 million loan from private equity firm Apollo. The non-call period on this loan, restricting Stonegate from selling the pubs, is set to expire in January.
Established in 2010 through the acquisition of 333 pubs from Mitchells & Butlers by private equity firm TDR Capital for £373 million, Stonegate faced challenges with the recent attempted sale. The company recently listed 23 of its pubs for sale, with Savills overseeing the sales process, following reports of collaboration with restructuring specialists from AlixPartners.
Regarding the wider pub industry, Tim Martin, the CEO of Wetherspoon, expressed intentions to minimize price increases amidst rising taxes. Despite generating revenues of £2.13 billion for the year, Martin emphasized the company’s efforts to keep price hikes to a minimum.
Martin acknowledged potential challenges from government-led cost escalations, particularly in energy prices, while remaining cautiously optimistic about the financial outlook for the year.