Revo­lu­tion Bars re­buffs Deltic all-pa­per merger of­fer and asks for cash

Yorkshire Post - Business - - BUSINESS -

TAKEOVER TAR­GET Revo­lu­tion Bars has re­jected the lat­est ad­vance from Bri­tain’s big­gest night­club op­er­a­tor to merge the two firms, in­stead say­ing it would pre­fer a cash of­fer.

Deltic last week pro­posed an all-pa­per merger that would see embattled Revo­lu­tion own 65 per cent of a com­bined en­tity and Deltic the re­main­ing 35 per cent, creat­ing a bar gi­ant with an­nual sales of more than £270m.

How­ever, Revo­lu­tion has so far favoured a takeover of­fer by Slug And Let­tuce owner Stonegate, which struck an agree­ment in Au­gust to ac­quire it in a £101.5m deal.

Revo­lu­tion, which owns more than 60 Revo­lu­tion and Revolu­cion de Cuba high street bars, said of Deltic’s ap­proach: “The board does not be­lieve that the merger pro­posal would cre­ate share­holder value for Revo­lu­tion’s ex­ist­ing share­hold­ers in ex­cess of the cer­tain and im­me­di­ate value rep­re­sented by the rec­om­mended 203p cash of­fer from Stonegate Pub Group.

“The board en­cour­ages Deltic to make a cash of­fer for Revo­lu­tion rather than con­tin­u­ing to fo­cus on its cur­rent merger pro­posal.”

Revo­lu­tion share­hold­ers are due to meet next week to vote on the Stonegate of­fer.

The lat­est twist in the takeover saga comes af­ter Revo­lu­tion re­vealed ear­lier this month that an­nual prof­its fell by 29 per cent to £3.6m and cau­tioned over cool­ing au­tumn sales.

The firm said like-for-like sales rose by 1.5 per cent in the year, but added that trad­ing since its year-end has been hit by a “dis­ap­point­ing” Septem­ber, with firstquar­ter sales growth eas­ing back to 0.3 per cent.

It was knocked by a sec­tor­wide surge in costs, in­clud­ing the im­pact of the liv­ing wage and the new ap­pren­tice­ship levy, as well as an above-in­fla­tion in­crease in busi­ness rates.

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