Solihull-based Stonegate operates approximately 4,500 pubs and bars throughout the UK. Its estate includes several of the high street’s best-known brands, such as Slug & Lettuce, Be At One, Walkabout and Popworld.
City sources cited by The Times claim that as many as four prospective buyers have shown interest in Stonegate’s ‘Platinum’ pub division, which is believed to carry a value of about £300 million.
Heineken is reportedly the leading contender. The Dutch brewer currently operates roughly 2,350 UK pubs through its Star Pubs business and is understood to have held discussions with Stonegate during the summer.
The potential transaction comes as food and beverage industry trends, food manufacturing trends and food distribution trends continue to influence investment across the wider hospitality and consumer goods markets. At the same time, food processing technology, food and drink industry innovation, food and drink sustainability, food and drink regulations, food and drink packaging, food and drink marketing and changing food and drink consumer trends are reshaping the sector.
Former BrewDog executive David McDowall leads Stonegate, which carries debt of approximately £3 billion. Much of that borrowing followed the company’s expansion before the Covid-19 crisis, including its 2019 acquisition of rival Ei Group, previously known as Enterprise Inns.
The nationwide closure of pubs during the pandemic placed considerable pressure on those acquired businesses. Stonegate is therefore understood to be assessing the sale of about 1,000 premium venues. The Sunday Times reported last year that the group was seeking approximately £1 billion for the portfolio.
Several other investors are also reportedly examining the opportunity. They include Terra Firma, the private equity business founded by Guy Hands, Bain Capital and US activist investor Elliott Advisors, which holds a stake in Pernod Ricard.
