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 disposal of nearly a quarter of its locations. The Times initially reported that Stonegate executives have been in discussions with potential advisors.
According to reports, approximately 1,034 of its “platinum” pubs could be put on the market, with an estimated combined worth of £1 billion. Despite achieving a turnover exceeding £1.7 billion last year, Stonegate faces debts exceeding £3 billion.
The company accrued a significant portion of its debt following the 2019 acquisition of Ei Group, which occurred shortly before the COVID-19 pandemic led to the closure of pubs nationwide.
Stonegate mentioned that they are evaluating various options for the Platinum portfolio, including refinancing, a partial sale, or a complete sale of the sites, emphasizing that no final decisions have been made as of yet. The company continues to make progress on its transformation strategy.
In a previous attempt in 2023, Stonegate failed to sell a similar number of pubs. Consequently, the company refinanced 1,000 of its venues with a £638 million loan from private equity firm Apollo. The non-call period on this loan, which prevented Stonegate from selling the pubs, is set to expire in January.
Established in 2010 through the acquisition of 333 pubs from Mitchells & Butlers for £373 million by TDR Capital, Stonegate has put up 23 of its pubs for sale this year, with Savills managing the sales process. This decision followed reports indicating collaboration with restructuring specialists from AlixPartners.
A spokesperson from Stonegate highlighted that as the largest pub company in the UK, they regularly review their portfolio for potential divestment opportunities, clarifying that the transaction handled by Savills is considered a routine business deal.
In other pub-related news, Tim Martin, the CEO of Wetherspoon, pledged to minimize price hikes after the company generated revenues totaling £2.13 billion for the year. Martin expressed the company’s intention to mitigate price increases despite potential tax rises affecting the broader pub industry, aiming to maintain competitive pricing.
Martin further stated that Wetherspoon anticipates a reasonable financial outcome for the year, acknowledging that Government-induced cost escalations, particularly in energy, could impact the final results.