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