Heineken’s UK pub arm Star Pubs is reported to be leading the bidding for around 300 pubs from Stonegate, in a deal valued at about £300 million. The talks were reported at the weekend on unnamed City sources and are described as close to concluding, with other bidders still involved. Neither company has confirmed anything.
Star Pubs, which runs around 2,350 pubs, would be buying from a group several times its size. Stonegate operates roughly 4,300 pubs and carried debt of more than £3 billion as at September 2024, with annual finance costs of £455 million.
Disposals are not a new development there: the company has sold sites every year since acquiring Ei Group in 2019, and converted almost 400 managed pubs to leased and tenanted in the 18 months to June.
A tranche of a much larger disposal
In November, Stonegate confirmed it was reviewing its Platinum portfolio of around 1,000 leased and tenanted pubs, described as among its most valuable freeholds and valued at up to £1 billion, with refinancing, a partial sale and a full sale all under consideration.
Whether the 300 pubs now reported come out of that portfolio has not been stated by either side. What is on the record is the strategy behind it, set out by the chief executive in June.
Both sides sit under the Pubs Code
The Pubs Code 2016 regulates pub-owning businesses with 500 or more tied pubs in England and Wales, and there are six of them: Admiral, Greene King, Marston’s, Punch Pubs, Star Pubs and Stonegate. Buyer and seller are both on that list, so tied tenants moving across would stay inside the same statutory regime, keeping the fair dealing principle, the no-worse-off principle and the Market Rent Only gateways.
The Code does not extend to Scotland or Northern Ireland, where Star Pubs lists separate agreement variants, the same territorial split that runs through UK franchise law: how England, Scotland and Northern Ireland differ.
Good to know
None of this is franchising, and Star Pubs does not use the word. Its offer is a Foundation Tenancy, an Investment Tenancy, a fully repairing and insuring lease, or the Just Add Talent management agreement, where the operator takes 20% to 30% of net turnover plus 20% of net profit. These are landlord and tenant relationships under the Pubs Code, not franchise agreements, one of the distinctions drawn in 10 key terms every UK franchisee should know.
What would change for the tenants?
For a tied tenant, a change of pub-owning business changes the landlord, the tie and the agreement suite on offer at renewal, not the statutory protections. Star Pubs ties beer, cider and soft drinks while leaving wine and spirits free of tie, so the buying terms a tenant works to would be redrawn.
Supply obligations of this kind appear in franchising too, where they sit in the franchise agreement with no statutory code behind them. A sale of this size also resets which company each tenant deals with under the Code, which matters at rent review and at renewal rather than on completion day.
What to watch from here
The reporting rests on unnamed sources and rival bidders are still in the frame, so the first thing to watch is simply whether either company confirms. After that, the questions are which pubs are in the tranche, whether they are tied or free of tie, and whether Stonegate stays above the 500-tied-pub threshold that brings it within the Pubs Code at all. A disposal programme of this scale eventually reaches that line.
