Stonegate considers £1bn sale of 1,000 pubs
Stonegate, Britain’s largest pub operator, has confirmed it is considering the sale of 1,000 pubs from its ‘platinum’ division in a deal that could be worth around £1 billion as it seeks to cut back on debt.
The chain currently operates and owns 4,300 pubs across the country, but is considering the sale of nearly a quarter of its sites, in a bid to reduce debt, The Sunday Times reported over the weekend.
Speaking to the drinks business, a Stonegate spokesperson confirmed that the operator, which owns Slug & Lettuce and Be At One, is eyeing a sale: “We are looking at options for the ‘platinum’ portfolio, of circa 1000 leased and tenanted pubs, which could include a refinancing, partial sale, or full sale of the ‘platinum’ sites but as we explained to our bondholders, no decisions have been made. We are continuing to make good progress on our transformation strategy.”
The ‘platinum’ sites are internally regarded as among the company’s strongest assets.
Changing estate
The Times report claimed that Stonegate executives had begun talks with advisers ahead of a non-call period on the Apollo-financed securitisation of the Platinum estate, valued as high as £1bn.
In 2024, the company brought in more than £1.7bn in revenue, but also suffered a pre-tax loss of £214m, the company, which is owned by TDR Capital, is shouldering more than £3bn in debt as of September 2024. Much of which was accrued when it merged with rival chain Ei Group (formerly Enterprise Inns) in 2020 – a move which meant it outstripped Greene King as the UK’s largest pub operator.
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It’s not the first time Stonegate has tried to sell a similar number of sites. In 2023, a bid to offload approximately 1,000 venues was unsuccessful.
Subsequently, the pubo securitised the ‘Platinum’ pubs with a £638m loan from private equity house Apollo. In September, the Solihull-based operator put 23 of its pubs up for sale, including London boozers the Dog and Duck in Walthamstow and the Crown and Anchor in Bromley.
Stonegate history
According to sources cited by The Times, private equity buyers may be interested in bulk acquisitions of the ‘premium’ pub package due to the scale of the portfolio.
Stonegate was originally formed more than a decade ago in 2010 with the purchase of 333 pubs from Mitchells & Butlers. Today, it has more than 4,500 sites following its purchase of Ei Group for £1.27bn, where it absorbed the operator’s 4,000-strong estate.
Stonegate’s chief executive, David McDowall, who joined Stonegate in 2023 from BrewDog, previously outlined a “transformation plan”, that would see managed sites convert to Leased and Tenanted and Craft Union operational models. As part of the programme, the business has succeeded in transitioning 200 managed pubs to alternative operating models across a two-year period, it announced in August.
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