Hospitality group Revolution Bars rejects Nightcap takeover deal

  • Nightcap’s founder is former Dragons Den star Sarah Willingham 
  • Revolution’s present restructuring strategy includes closing 18 venues 

Revolution Bars has turned down a proposed takeover by fellow hospitality chain Nightcap, claiming it is ‘incapable of being delivered.’

The London-listed firm confirmed earlier this month that it had been speaking about a possible acquisition deal with Nightcap, whose founder is former Dragons Den star Sarah Willingham.

Under Nightcap’s proposal, Revolution would implement its present restructuring strategy, which includes closing 18 venues and reducing rents on another 14 sites.

Takeover talks: Revolution Bars confirmed earlier this month that it had been speaking about a possible acquisition deal with Nightcap

However, the company would engage in two separate equity fundraisings instead of the £12.5million fundraising announced in April.

Revolution said the non-binding offer is unfeasible because funding would not be available in time for the planned launch.

It added that Nightcap would require more time to engage in due diligence prior to making an acquisition offer, thereby ‘creating material delivery risk.’

‘Following legal advice, the board has concluded that the Nightcap proposal is incapable of being delivered, which was communicated to Nightcap last week,’ the Manchester-based company said. 

But the business said it ‘remains open to considering’ any future offer from Nightcap once the restructuring plan is finished and it has been sufficiently recapitalised.

Revolution, which runs the Peach Pubs and Revolucion de Cuba brands, has seen demand dampened over the past few years by Covid-related restrictions and cost-of-living pressures affecting the hospitality sector.

Soaring energy costs led the firm to close its venues on Mondays and Tuesdays.

Dan Coatsworth, investment analyst at AJ Bell, said: ‘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.’

Revolution has also blamed the surge in people working from home for hitting Friday sales and successive railway worker strikes for damaging trade at its city centre outlets.

Despite enjoying a strong performance over Christmas, Revolution slashed its profit forecasts in January due to weak post-festive sales and inflation-busting increases in business rates and salary costs.

And last month, trading of its shares was suspended on the junior AIM market after it failed to publish its half-year results on time.

Revolution Bars Group shares were 4.6 per cent down at 1.43p on Tuesday morning and have slumped by around 73 per cent since the year began.