Stonegate opens £100m takeover talks with Revolution Bars Group

Maclay Inns

Stonegate Pub Company has opened talks with Revolution Bars Group about a potential takeover that would value the bar chain at around £100m.

Revolution confirmed that it received a conditional proposal from Stonegate to acquire the business at a cash price of £2 per share in a filing to the London Stock Exchange.

The firm said discussions were “ongoing” and confirmed that Stonegate is undertaking its due diligence review.

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However, it noted that there is no certainty that any offer for the company will be made, nor as to the terms on which any offer might be made.

Stonegate has 28 days to announce either a firm intention to make an offer for Revolution or end its interest.

Back in May, Revolution warned that its figures this year would be below the predicted profit of around £17m £18m analysts were hoping for.

The brand, which now has 67 sites, blamed site openings, higher business rates bills, increased wages and the new apprenticeship levy for damaging profit forecasts.

It also said that its five new Revolucion De Cuba branches, which it opened in the past year, are “taking longer to mature to full profitability than originally anticipated”.

On top of this, key sites in Blackpool and Cardiff were closed for two weeks for refurbishment which has contributed to the damage.

But directors said that underlying sales were positive in H2 and that like-for-like sales grew by 1.7%.

In a statement, the group said: “The directors remain confident in the underlying strength of the business, its brands, the strong customer proposition and the business’ capability to deliver high returns on invested capital. Consequently, it remains the plan to open six new bars in the next financial year.”

Tags : acquisitionfinancialsRevolution Bars GroupStonegate
Andrew Seymour

The author Andrew Seymour

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