Revolution Bars Group – which operates bars and gastropubs, mainly under the Revolution, Revolucion de Cuba and Peach Pubs brands – branded an acquisition approach from Nightcap as being “incapable of being delivered”.
In a statement to the London Stock Exchange on Thursday (30 May), Nightcap, which owns and operates 46 bars including brands such as The Cocktail Club, Barrio Familia and The Piano Works, said: “Nightcap notes, with disappointment, the announcement by Revolution Bars… in which [it] rejected a non-binding proposal by Nightcap of a share for share offer for the entire issued and to be issued share capital of Revolution Bars.”
It added that after encouragement by shareholders of both businesses, Nightcap engaged in discussions with Revolution and “invested significant time and resources” to explore the offer, which it stated would have seen a merger of the businesses coupled with disposal of the Peach Pubs brand.
Improved outcome
A non-binding proposal was submitted to Revolution on 17 May 2024 which, Nightcap believed presented an improved outcome for Revolution’s shareholders and a significantly de-leveraged position for its creditors.
“At no point did Nightcap receive legal advice to suggest that this non-binding proposal was not capable of being delivered,” Nightcap said. “The non-binding proposal did not include a fixed fundraising amount as Nightcap did not receive detailed financial information to help identify the cash requirements of Revolution and the enlarged business until 21 May 2024.”
The Sarah Willingham-led business added if the potential offer had been implemented, it would have seen Revolution’s “highly dilutive £12.5m fundraising [bid] replaced by a merger of the two businesses, allowing for Revolution’s shareholders to suffer less dilution and achieve more value from their investment”.
Further opportunities expected
The offer would have included a fundraising and the implementation of the restructuring plan to be followed by a combination of the Nightcap and Revolution businesses as well as a sale of Peach Pubs.
Nightcap said it “respects that the board of Revolution Bars wish to pursue a different outcome and, as a result, Nightcap today confirms that it does not intend to make an offer for the entire issued and to be issued share capital of Revolution Bars.”
It added with five acquisitions made in just over three years, it is very well placed to continue executing on its consolidation strategy.
The board also believes opportunities for further consolidation in the late-night sector will continue to arise in the coming year as the sector moves from incremental M&A activity to a fundamental structural transformation as many of the operators in the sector are going through significant change.
