Stonegate Group, the owner of Slug & Lettuce and Be At One, is considering selling over 1,000 of its pubs. With a total of 4,300 venues in its pub chain, this move could involve letting go of nearly a quarter of its establishments. The potential sale of 1,034 “platinum” pubs is estimated to be worth around £1 billion. Despite a revenue of over £1.7 billion last year, Stonegate carries a debt exceeding £3 billion.
The company accumulated a significant portion of its debt through the acquisition of Ei Group in 2019, shortly before the onset of the COVID-19 pandemic which led to the closure of pubs nationwide. Stonegate’s spokesperson stated that they are exploring various options for the potential sale of the Platinum portfolio, emphasizing that no final decisions have been made. In a previous attempt in 2023, Stonegate was unsuccessful in selling a similar number of pubs, leading to a refinancing of 1,000 venues with a £638 million loan from Apollo, a private equity firm.
The non-call period on this loan, which restricts Stonegate from selling the pubs, is set to expire in January. Stonegate’s establishment in 2010 stemmed from TDR Capital’s purchase of 333 pubs from Mitchells & Butlers for £373 million. Recently, the company put 23 pubs up for sale with Savills overseeing the process. Tim Martin, the head of Wetherspoon, revealed plans to minimize price increases despite the company’s substantial revenues of £2.13 billion for the year. He acknowledged the possibility of price adjustments due to tax hikes but expressed a commitment to keeping such increases to a minimum.
As the UK’s largest pub company, Stonegate routinely evaluates its portfolio for potential divestment opportunities. The spokesperson for Stonegate emphasized that the current sale process led by Savills is a standard business transaction. Tim Martin from Wetherspoon highlighted the impact of government-led cost escalations on the financial outlook for the year, particularly in areas such as energy.