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Sat. Jul 20th, 2024

Nightcap ‘disappointed’ and ‘unconscious’ Takeover of the revolution could not be achieved

By Vaseline May30,2024

Thursday May 30, 2024 8:07 am

According to reports, Revolution Bars is in talks to sell about a quarter of its locations.

Nightcap’s board said it was disappointed that its takeover bid for troubled Revolution Bars had been rejected and that it was unaware that the deal ‘could not be realised’.

The statement followed a press release on Tuesday from London-listed Revolution, which said there were “a number of challenges in implementing” the Nightcap proposal and described the deal as “highly conditional”.

The owner of the Barrio and Blame Gloria chains made an offer for the ailing company on May 17, but it was ultimately rejected.

Revolution said at the time: “Following legal advice, the board has concluded that the Nightcap proposal cannot be implemented, which was communicated to Nightcap last week.

“There were a number of challenges in executing the Nightcap proposal, which was a highly conditional proposal and was subject to multiple 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 costs and potential untested legal and procedural issues.”

However, Nightcap – which wanted to merge the two companies – said it had not received legal advice at “any time”, suggesting the non-binding proposal could not be achieved.

“The non-binding proposal did not include a fixed fundraising amount as Nightcap did not receive detailed financial information to help identify the cash needs of Revolution Bars and the expanded business until May 21, 2024,” the report said.

“Nightcap’s board believes that the potential offer, had it been implemented, would have replaced Revolution Bars’ highly dilutive £12.5m fundraising (announced on April 10, 2024) with a merger of the two companies, thereby Revolution Bars’ shareholders will suffer less dilution and get more value from their investment.”

Revolution raised £12.5 million in emergency funding earlier this year to help it stay afloat.

It follows a challenging few months for the hospitality sector, which buckled under pressure from customers spending less on nights out.

Up to £3 million of the investment is being funded by former Pizza Express and Channel 4 chairman Luke Johnson, while a further £3 million will come from Germany’s Robus Recovery Fund II and £3.5 million from three existing shareholders.

Nightcap added: “Nightcap respects that the Revolution Bars board wishes to pursue a different outcome and as a result, Nightcap today confirms that it does not intend to make an offer for the entire issued and to be issued share capital of Revolution Bars.”

City AM has contacted Revolution for comment.

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