One of the world’s biggest investment banks has bid to buy around 1,000 pubs from Stonegate Group through its real estate investment arm, the Times of London reported, citing finance industry sources.

Stonegate Group, which runs 4,500 pubs across the U.K., is looking to offload a quarter of them to address a nearly £4 billion (around $4.9 billion) mountain of debt. The group needs to repay or refinance half its debt before July 2025.

Morgan Stanley Real Estate is bidding against Cerberus Capital Management for control of some of Stonegate’s distressed pub portfolio, the Times reported.

Representatives for Cerberus and Stonegate didn’t immediately respond to Fortune’s request for comment on the reported bid. A representative for Morgan Stanley declined to comment.

Stonegate owns several unbranded pubs, as well as chains including Slug & Lettuce, Be at One, and Craft Union.

The pub chain has found itself trapped under £3.8 billion ($4.6 billion) in borrowings, according to its latest quarterly financial report. The group needs to either pay back more than £2 billion of that debt by 2025 or negotiate new, likely unfavorable terms.

In January, credit rating agency Fitch gave Stonegate a negative B- rating, reflecting its looming refinancing risk in mid-2025.

“It also includes Stonegate’s vulnerability to the U.K. consumer whose discretionary spend may decrease wet sales despite the group’s diverse portfolio of brands, locations, and operating models,” the agency said of the newly fickle British pub patron.

British pubs in decline

Stonegate has sought to find new ways to make money amid its challenging financial situation. 

The group introduced “dynamic pricing” at its venues in September, charging customers about 20p ($0.24) more per pint at peak times. Stonegate said the plan, to be introduced at about 800 of its locations, would help it meet additional staffing requirements, in addition to licensing and security needs at its pubs. 

However, the strategy was derided by customers and industry experts alike, who argued it increased uncertainty and could drive people away during peak hours.

The group’s struggles encapsulate a U.K. pub sector in perennial decline over the 21st century. 

There were 14,000 fewer pubs across the U.K. in 2022 compared with 2000, according to British Beer and Pub Association (BBPA) data, representing a nearly 25% fall.

This accelerated to more than two pubs a day closing in the first six months of the year in the face of high energy costs, the Guardian reported citing Altus data. The 383 closures in the first half of 2023 almost matched the figure for the whole of 2022, when 386 pubs vanished, according to Altus.

Stonegate, on the other hand, has swollen its portfolio from just 333 when it started operations in 2010 to around 4,500 today, according to its website.

The proposed sale of a quarter of its premises may further accelerate the closure of U.K. pubs, with margin-focused bidders more likely to convert the spaces than continue to operate them in the same capacity.

Pubs are also facing unprecedented pricing pressures in the face of a supply chain crunch following COVID-19 and Russia’s invasion of Ukraine. The average price of a pint jumped 12.5% between 2020 and 2022, according to BBPA data.

For Stonegate, this translated into price increases of between 7% and 8% at its pubs, according to Fitch. The ratings agency also noted that Stonegate’s energy costs doubled to £70 million ($85 million) in 2023.

Despite the struggle of British pubs, Morgan Stanley and Cerberus may spy an opportunity to pick up a host of U.K. real estate premises on the cheap, perhaps converting them into residential spaces. 

Morgan Stanley may also be using the bid to pivot away from its investments in office properties. The bank has been incredibly bearish on the sector, warning in June that commercial real estate was heading for something “worse than in the Great Financial Crisis.”