Revolution Bars says Nightcap proposal ‘incapable’ of being delivered
Manchester-based bars group Revolution has dismissed an offer from rival bar operator Nightcap as “incapable of being delivered” and said it plans to proceed with its £12.5m fundraising plan.
A statement this morning (28 May 2024) from the stock market listed group, which operates bars and gastro pubs, including Revolution, Revolucion de Cuba and Peach Pubs brands, described an “exploratory” meeting with Nightcap and “several meetings and phone calls with Nightcap to discuss Nightcap’s interest in making an offer” for Revolution.
“However, following legal advice, the Board has concluded that the Nightcap Proposal is incapable of being delivered, which was communicated to Nightcap last week,” the statement said..
Dismissing Nightcap’s plan as “highly conditional” it said that as the proposal was subject to multiple equity fundraisings by Nightcap, and would take too long.
AIM listed Nightcap is currently seeking a £3.5 million fundraising for its estate of 46 bars, which include cocktail bars mainly in London, but it also owns Dirty Martini in Manchester and Tonight Josephine in Liverpool.
In April Revolution said it was pursuing a twin track rescue and restructuring deal with £3m of backing from entrepreneur Luke Johnson, £3m from the Robus Recovery Fund II and £3.5 million from three key existing shareholders.
Revolution also confirmed that other offers have been made for individual subsidiaries and assets, but said none of the proposals would result in a financial return to shareholders.
The board is recommending the current restructuring plan alongside a number of additional measures to be implemented across the group to re-shape its business.
However, the board is warning that if it doesn’t pass then a sale of assets through an insolvency process is an option.
Dan Coatsworth, investment analyst at AJ Bell, said: “Revolution Bars appeared to confirm suspicions that combining with Nightcap would just double the problems facing the two troubled night spot operators. It is striking to see a company say a bid is ‘incapable of being delivered’ and Revolution Bars continues to push shareholders to stick with its own restructuring plan.
“The bigger issues, throbbing away in the background like an insistent beat, are the rising costs and waning demand faced by this end of the hospitality sector. Fewer younger people are in the habit of going out drinking on a regular basis, meaning late-night operators need to come up with new ways to keep people frequenting their outlets.”
