- Nightcap was co-founded by former Dragons Den star Sarah Willingham.
- Revolution Bars said Nightcap’s proposal was “incapable of being fulfilled”
Nightcap ended its attempt to acquire Revolution Bars after being told its recent offer was not feasible.
The hospitality company, co-founded by former Dragons Den star Sarah Willingham, offered to buy Revolution but was rejected last week.
Under Nightcap’s non-binding proposal, Revolution would embark on its planned restructuring strategy, which includes closing 18 locations and reducing rents at a further 14 sites.
Rejected: Hotel chain Nightcap, co-founded by former Dragons Den star Sarah Willingham (pictured), offered to buy Revolution but was rejected last week.
However, the Manchester-based company would launch two separate equity fundraisings instead of the suggested £12.5m announced in April.
Nightcap believed the deal would ensure that Revolution Bars investors would experience less dilution of their shares and greater value from their investments.
But Revolution, which runs the Revolución de Cuba and Peach Pubs brands, said the deal was “unable to come to fruition” because funds would not be available in time for the planned launch.
He added that it would create a “significant delivery risk” because Nightcap would need more time to conduct due diligence before making a takeover offer.
Nightcap told shareholders on Wednesday that its proposal did not include a fixed fundraising amount and that “at no time” did it receive legal advice saying the offer could not be met.
The London-listed group said: “Nightcap respects that the Revolution Bars board wishes to pursue a different outcome and, as a result, Nightcap today confirms that it has no intention of making a bid.”
Since its founding during the Covid-19 pandemic, Nightcap has expanded primarily through acquisitions, including cocktail bar chain Dirty Martini, The Piano Works and Latin American-inspired Barrio Familia.
But like many hotel companies, it has since struggled amid consumer cost-of-living pressures.
Despite recording record sales over the festive period, Nightcap’s like-for-like revenue fell 10 per cent in the six months to December, while its pre-tax losses doubled year-on-year to £1.8m.
Responding to the results, Willingham said it anticipated the first half of 2024 to be “uncertain and challenging” but thought the hospitality sector had borne “the worst of this recession”.
Cup actions held steady at 3.9p mid-morning on Thursday, while Revolution Bars Group Shares They were 2.2 per cent lower at 1.13p.