Stonegate pubs: Heineken in talks over a £300m deal

Heineken's Star Pubs and Bars is in talks to buy around 300 Stonegate pubs in a deal valued at about £300m, according to a Sunday Times report at the weekend.

Stonegate is the largest pub operator in the United Kingdom, with roughly 4,500 sites. It has spent the year working through a portfolio it calls Platinum, about 1,000 freehold pubs identified as its strongest performers, while it reduces borrowings of around £3bn. The two sides are reported to have been talking across the summer.

What 300 Stonegate pubs would add

Scale decides what a pub estate pays for beer, energy and insurance.

Star Pubs and Bars runs about 2,350 pubs in Britain. Another 300 would push the estate past 2,600 and make Heineken one of the larger landlords in a market where scale decides what you pay for beer, energy and insurance.

Neither company would confirm the talks. A Stonegate spokesperson said that "no decisions have been made" and pointed to first-half profit up 9% to a record £201m. Heineken said it was "aware of reporting regarding a package of pubs offered to the market by the Stonegate Group" but would not comment on speculation of that nature.

A £3bn debt pile behind the sale

The talks follow a run of smaller disposals. Earlier in September Fuller's exchanged contracts on ten Stonegate pubs for £35.25m, and Stonegate moved a further 100 sites into its Pub Partners leased division. In June, Terra Firma was reported to have weighed a £300m bid for a similar number of pubs.

All of it is happening in a trading year that has not helped. Operators have absorbed higher employer National Insurance, a higher minimum wage and energy bills that have not come back down; more than 800 hospitality businesses signed an open letter asking for a cut in hospitality VAT this month.

The Sunday Times said there was no guarantee of a deal and that other bidders were still circling, some of them interested in the full 1,000-pub package rather than a slice of it. Stonegate's own line is that the transformation is going to plan. Both things can be true at once.