Skip Header
Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

Revolution Bars rejects Nightcap takeover proposal

(Sharecast News) - Revolution Bars said on Tuesday that it has rejected a rescue deal by Nightcap as it is "incapable of being delivered" and that it will press ahead with a £12.5m fundraising. The AIM-listed bar operator announced earlier this month that it had held "an exploratory meeting" with Piano Works owner Nightcap about a range of possible transactions, including a potential takeover.

Since then, Revolution has had several meetings and phone calls with Nightcap to discuss its interest in making an offer for the company.

On 17 May, Revolution received a non-binding proposal from Nightcap. This proposal would still require Revolution to proceed with the restructuring plan, but not the existing fundraising of £12.5m.

"However, following legal advice, the board has concluded that the Nightcap proposal is incapable of being delivered, which was communicated to Nightcap last week," it said.

"There were a number of challenges to the delivery of the Nightcap proposal, which was a highly conditional proposal and which was subject to multiple equity fundraisings by Nightcap, assumptions regarding the support of the company's and Nightcap's respective lenders, material due diligence, as well as significant time, material cost and potential untested legal and procedural issues."

Among the challenges, Revolution pointed to the fact the Nightcap proposal would require two separate equity fundraisings to successfully complete.

"The board notes that, should the restructuring plan proceed and be sanctioned by the Court, it would preserve value for the company's current shareholders by comparison to the offers received from the M&A process which provided no equity value, whilst acknowledging the dilutive effect of the fundraising for those shareholders who have not participated in its pro rata to their current shareholdings," it said.

At 0915 BST, the shares were down 6.3% at 1.40p.

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."

Share this article

Related Sharecast Articles

Atlantic Lithium upbeat on Ghanaian minister's comments
(Sharecast News) - Atlantic Lithium said in an update on Friday that it welcomed comments from Ghana's Minister of Lands and Natural Resources confirming that revised terms of the Mining Lease for the Ewoyaa Lithium Project were being prepared for Cabinet and parliamentary review, representing the final step in the project's permitting process.
Metals One acquires 10pc stake in NovaCore Exploration
(Sharecast News) - Metals One announced the acquisition of a 10% stake in NovaCore Exploration, a private U.S.-based company developing the Red Basin Uranium Project in New Mexico, on Friday, as well as the securing of warrants to increase its ownership to up to 30%.
Asiamet appoints financial adviser as part of BKM strategy
(Sharecast News) - Asiamet Resources announced the appointment of Grant Samuel as financial adviser on Friday, to lead its strategic investor engagement process for the BKM Stage 1 Copper Project in Central Kalimantan, Indonesia.
Centaur Media completes MiniMBA sale, mulls shareholder return
(Sharecast News) - Centaur Media announced on Friday that it has completed the sale of its MiniMBA business to Brave Bison for an enterprise value of £19m, following the initial announcement of the transaction on 25 June.

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Award-winning online share dealing

Search, compare and select from thousands of shares.

Expert insights into investing your money

Our team of experts explore the world of share dealing.