Stonegate Group, the owner of Slug & Lettuce and Be At One, is considering selling over 1,000 of its pubs. The pub chain, with a total of 4,300 venues, may divest nearly a quarter of its establishments. Stonegate executives are reportedly in discussions with potential advisors, as first reported by The Times.
It is speculated that around 1,034 of Stonegate’s high-value “platinum” pubs could be part of the sale, amounting to a potential collective worth of £1 billion. Despite a revenue exceeding £1.7 billion last year, the company faces debts exceeding £3 billion.
The significant debt accumulation occurred following the 2019 acquisition of Ei Group by Stonegate, just before the pandemic-induced closure of pubs nationwide.
A Stonegate spokesperson stated that they are exploring various options for the Platinum portfolio, including refinancing, partial sale, or full divestment of the sites. However, no final decisions have been made, and the company continues to progress in its transformation strategy.
In a previous attempt to sell a similar number of pubs in 2023, Stonegate was unsuccessful. Subsequently, the company refinanced 1,000 venues with a £638 million loan from private equity firm Apollo. The non-call period on this loan, restricting the sale of the pubs, is set to expire in January.
Established in 2010 through the acquisition of 333 pubs from Mitchells & Butlers, Stonegate has been actively managing its portfolio. The company recently put 23 pubs up for sale, collaborating with Savills for the sale process and seeking advice from restructuring specialists at AlixPartners.
In other pub-related news, Tim Martin, the head of Wetherspoon, expressed intentions to minimize price increases despite generating revenues of £2.13 billion for the year. Martin highlighted the challenges of potential tax hikes in the industry but emphasized efforts to keep price adjustments to a minimum. He also mentioned the impact of governmental cost increases, particularly in energy, on the company’s financial outlook.