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 offload nearly a quarter of its establishments. Reports from The Times indicate that Stonegate executives have been in discussions with potential advisors.
According to sources, Stonegate is looking to sell around 1,034 of its premium pubs, collectively valued at approximately £1 billion. Despite a revenue exceeding £1.7 billion last year, the company is burdened with debts surpassing £3 billion. The significant debt accumulation stemmed from Stonegate’s acquisition of Ei Group in 2019, just before the pandemic forced pub closures nationwide.
A representative from Stonegate mentioned to The Mirror that they are exploring various options for their Platinum portfolio, including refinancing, a partial sale, or a complete sale of the identified pubs. However, no final decisions have been made yet, as the company continues to advance its transformation strategy.
In a previous attempt in 2023, Stonegate tried to sell a similar number of pubs without success. Subsequently, the company refinanced 1,000 venues with a £638 million loan from private equity firm Apollo. The non-call period on this loan, which restricted the sale of the pubs, is set to expire in January.
Established in 2010 after an acquisition of 333 pubs from Mitchells & Butlers by private equity firm TDR Capital, Stonegate is now contemplating potential divestment strategies for its pub portfolio. Recent reports indicated that the company put 23 pubs up for sale, with Savills managing the sale process. Stonegate clarified that such divestments are part of their routine portfolio evaluation.
In other pub-related news, Tim Martin, the CEO of Wetherspoon, expressed intentions to minimize price hikes following the company’s revenue of £2.13 billion for the year. Martin acknowledged the inevitability of some price adjustments due to tax increases but emphasized Wetherspoon’s commitment to keeping price increments minimal.
Looking ahead, Martin anticipates a favorable outcome for the financial year, although potential cost escalations, especially in energy, due to government policies may impact the overall financial performance.