Revolution Bars agrees Stonegate's £100m takeover offer
Revolution Bars Group has agreed a £101m takeover offer from Stonegate pub company.
The boards of Stonegate, which owns the Slug and Lettuce brand, and Revolution agreed the terms of a cash offer of 203p-a-share, representing 10.5 million shares.
Revolution Bars Group, which operates more than 60 bars across the country under the brands Revolution and Revolucion de Cuba, struggled over the past few months with the national living wage and apprenticeship levy lowering the value of its shares.
In addition to the offer from Stonegate, it has also been subject to interest from nightclub operator Deltic, although Revolution's board last week said that it did not wish to discuss Deltic's alternative proposale.
Revolution's largest shareholder is Artemis, which is said to be backing the deal with Stonegate.
Stonegate is majorly-owned by TDR Capital and owns 689 pubs and bars in the UK including Walkabout, which it acquired in December last year. The company was founded in November 2010 following the acquisition of 333 pubs from Mitchells & Butlers.
The terms of the deal will now be put to Revolution shareholders, who will need to approve it by a majority.
Keith Edelman, non-executive chairman of Revolution, said: "We believe that the offer from Stonegate represents an attractive and certain value in cash today for Revolution shareholders, reflecting the high quality of the business, its people, market position and future prospects. The Stonegate proposal provides considerable opportunities for our people and for the business as a whole. Stonegate is an experienced operator in this sector that understands Revolution's ethos with its unique premium bar offering."
Ian Payne, chairman of Stonegate, added: "We are delighted to announce this agreement with Revolution, which is a business we know well and whose leading position in the premium segment of the drinking out market is a highly complementary addition to our existing offering.
"Our strong reputation and position in the market firmly establishes Stonegate as the natural home for Revolution's brands, and will allow us to enhance further the breadth of offer and occasions we cater for. This acquisition is entirely consistent with our stated strategy to capitalise on the town and city centre drink-led opportunity.
"Stonegate has a successful track record of investing in and growing the businesses which it has acquired. Revolution is a high-quality business with good people and an attractive consumer proposition. We look forward to working together with our new colleagues joining the enlarged Stonegate group to continue to provide a great experience for customers."
However, Deltic still hasn't given up on the possibility of securing a merger with Revolution. Responding to this morning's news, Deltic said that it thought Stonegate's offer "significantly undervalued" Revolution, and that it had been granted due diligence access which it was currently undertaking "with a view to formalising its possible merger proposal".
It also said it would publish an update of its past financial performance, which it said would show the strength of the business, with an EBITDA for the year ended February 2017 of £13.3m.
"Notwithstanding that the possible merger proposal outlined by Deltic in its announcement on 15 August 2017 currently remains Deltic's preferred structure through which to combine the business of Deltic and Revolution thereby capturing the benefit of synergies for Revolution shareholders, Deltic confirms that it is also evaluating a possible cash offer for the entire issued and to be issued share capital of Revolution," the statement said.
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