The cash offer, valuing the all-day café-bar-restaurant business at about £350.5m, was made public on Thursday 28 November.
Bidco stated on the London Stock Exchange: “Bidco is pleased to announce that… it has procured a non-binding letter of intent from Canaccord Genuity Asset Management to vote in favour of the acquisition in respect of, in aggregate, 1,755,500 Loungers Shares, representing approximately 1.7% of the existing issued ordinary share capital of Loungers as of 28 November 2024.
“In total, therefore… Bidco has procured irrevocable undertakings and a non-binding letter of intent, in respect of, in aggregate, 43,529,702 Loungers shares, representing approximately 41.9% of the existing issued ordinary share capital of Loungers.”
Shareholders resist sale
However, it has been reported in The Times that two of Loungers’ largest shareholders are against the proposed deal.
While the group’s directors have recommended shareholders vote in favour of the deal, Mark Slater, whose firm Slater Investments owns a 10.4% stake in Loungers, said he will reject the takeover, arguing “it’s the wrong time to be trying to sell a very good business of this kind”.
Meanwhile, Dan Harlow, head of UK Equity at AXA Investment Managers, which also intends to vote against the planned sale, echoed Slater’s point, saying management’s frustration with the share price “is no excuse to throw the towel in at what we consider could be the darkest hour”.
Loungers opened its fourth Brightside venue this week and currently operates 280 sites under the aforementioned Brightside brand plus Lounge and Cosy Club.
35 more sites this year
In its results for the first half of its current financial year, it has seen revenue and adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) climb by 19.2% and 25.0% respectively.
It also said it intends to open 35 more sites in the current financial year.
Fortress Investment Group is a global investment manager with approximately US$48bn in assets under management as of 30 June 2024.
Its approach is to acquire companies with strong management teams and empower them to deliver their long-term strategy with one of its businesses in the UK being Punch Pubs.
