Cheers! Revolution Bars in £101m deal with Slug and Lettuce owner
Manchester-based Revolution Bars Group – the operator of Revolution and Revolución de Cuba brands – is to be bought by Stonegate Pub Company for £101.5m.
Listed Revolution, which is headquartered in Ashton-under-Lyne, received the conditional purchase proposal from Luton-based Stonegate, which owns the Slug and Lettuce and Yates’s brands, at the start of this month.
Today’s agreed offer price of 203 pence a share in cash represents a premium of around 62.40%.
The deal puts paid to another offer made just nine days ago by Deltic Group, which is Britain’s biggest nightclub operator, to merge with Revolution.
Deltic, which has a 57 club estate, was acquired by its current shareholders out of the administration of Luminar plc in 2011. In June, the group put its proposed stock-market listing on hold becuase of challenging trading conditions.
Revolution management responding by saying they weren’t interested in the merger deal and had concerns “over both the value and deliverability of the combination and did not see any merit in progressing their proposal”.
Stonegate, meanwhile, is the fourth largest managed pub company in the UK, with around 690 sites.
It began trading in 2010, following the acquisition of 333 pubs from Mitchells & Butlers and has since grown in size and scale through a series of strategic acquisitions.
Revolution has endured a tough few months, suffering a sharp drop in its share price in May after it said it was facing “well published sector cost headwinds” and profits have been hit by the Living Wage, new apprenticeship levy and above-inflation increases in business rates.
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, said: “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.”
