A £300m deal to take TGI Fridays public has collapsed, with the investment vehicle involved in facilitating the move citing “extraordinary” conditions for backing out.
The chain, which has 85 sites in the UK, was all set to become a publicly-listed outfit again after its parent company, TGIF Holdings, agreed a sale to blank check company Allegro Merger Corp in a transaction worth $380m (£297m) back in November.
Blank check companies are typically listed organisations with no operations that raise money from investors via an IPO for acquisitions.
But a federal regulatory filing posted last week reveals that the planned merger is now off after the two parties “mutually” agreed to terminate the deal due to “extraordinary market conditions and the failure to meet necessary closing conditions”.
Last month, Allegro had secured an extension of the timeline for taking over TGI Fridays, until 30 April. By pulling out of the deal, Allegro will now cease to exist and all funds will be returned to Fridays shareholders once Allegro has been liquidated.
TGI Fridays is one of the world’s largest international restaurant franchising businesses, with more than half of its 840 branches located outside of the US.
The business generated sales of around $2 billion (£1.54 billion) last year and licensing accounts for 70% of its total profitability.
Within the past year, Fridays has made substantial improvements to its management team, bringing in CEO Ray Blanchette, a 19-year company veteran who previously led the successful turnaround and subsequent IPO of Ignite Restaurant Group.
Subsequently, he brought both John Neitzel and Jim Mazany back to Fridays to run franchising and company stores, respectively.
The collapse of the deal will come as a major blow to Mr Blanchette’s plans for the business. When the deal was announced in November, he said: “The first order of business when I took over this company was to bring in the best talent to improve operations and innovation. This transaction is the next significant strategic move, and will allow us to gain public company status and access incremental equity capital to accelerate the rejuvenation of this iconic global brand.”