Revolution Bars rejects Deltic share merger offer, encourages cash bid
Revolution Bars has rejected an all-share merger proposal from nightclub owner Deltic Group, suggesting on Monday that the group make a cash offer.
REVOLUTION BARS
£0.01
17:35 26/04/24
The company said it does not believe the pursuit of a merger with Deltic is in the best interests of Revolution or its shareholders and, in the absence of a firm cash offer, maintains its unanimous recommendation that shareholders vote in favour of Stonegate's offer at the shareholder meetings later this month.
“This is principally due to the board continuing to believe that there are significant areas of uncertainty associated with both the proposed value and deliverability of Deltic's current merger proposal, in particular the unpredictability of whether and when it would ever deliver value to the company's shareholders.
“This contrasts with the firm and recommended cash offer for the company made by Stonegate which, if supported by shareholders on 17 October 2017, will deliver a certain cash return in early November 2017 to Revolution's shareholders at a premium of approximately 62.4% to the closing price per Revolution share on 28 July 2017. Consequently, the board has encouraged Deltic to focus on making a cash offer for Revolution rather than continuing to focus on its current merger proposal.
Last Thursday, Deltic laid out its plans for a merger with Revolution Bars after its previous proposal was rejected and despite the company having already agreed a deal with Slug and Lettuce owner Stonegate.
Under the terms of the deal, Revolution shareholders would own 65% of the new company, with Deltic owning the rest, and the merged entity would be run by the current Deltic management team.
Deltic said the enlarged group should benefit from around £6.8m of currently identified pre-tax cost synergies and around £0.9m of pre-tax financing synergies. In addition, the group is expected to be "highly cash generative" and financed conservatively, with gearing no higher than 1.5x adjusted EBITDA.
At 1330 BST, the shares were up 1.8% to 210.67p.