Late night operator the Deltic Group has suggested a possible merger with Revolution Bars Group.
Revolution is Deltic's major competitor in the UK late-night market, however Revolution's recent poor share price performance resulted in an offer by the Stonegate Pub Company to acquire the entire issued share capital of Revolution at 200p per share.
Deltic said it would be a "disappointing outcome after two years of roll out and investment to merely return to its shareholders the same value of the business as at its 2015 IPO".
Deltic believes that a combination of its business with Revolution would transform the scalability of the enlarged group and operational issues would be better addressed by Deltic's management team.
The combined business would continue to be listed on the London Stock Exchange, which Deltic believes could create "significant medium-term value potentially of greater attraction to Revolution shareholders than the possible Stonegate 200p per share offer".
Revolution has determined that it does not wish to engage in discussions with Deltic towards a merger, however Deltic has encouraged Revolution to reconsider.
The deadline for Deltic either to make an announcement of its entry into a transaction, or to announce that it does not intend to enter into such a transaction, is 12 September 2017.
In a response to Deltic's announcement, Revolution said: "The board of Revolution Bars Group notes the announcement made this morning by Deltic Group. The board confirms that it received a possible proposal from Deltic and thereafter met with Deltic. Based on these preliminary interactions, the board had concerns over both the value and deliverability of the combination and did not see any merit in progressing their proposal as the board believes that a combination of Revolution and Deltic is not in the best interest of shareholders at this time. The company continues to engage with Stonegate Pub Company in connection with the possible offer, as announced on 31 July 2017."
Deltic was acquired by its current shareholders out of the administration of Luminar, its predecessor firm, in 2011. The group has since refurbished the majority of its 57-strong club portfolio. The Revolution Bars Group has a trading portfolio of more than 50 Revolution and Revolución de Cuba bars and restaurants across the UK.
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