Stonegate Pub Company has insisted it will stand firm on its 203p-a-share offer for Revolution Bars Group.
Chairman Ian Payne stressed that Stonegate had always been “disciplined in the prices we pay for acquisitions” and reiterated that its offer would bring certainty to Revolution shareholders.
There had been speculation that in the light of the Deltic Group’s now aborted proposal to merge with Revolution, that Stonegate would have to up its offer, which values the Mark McQuater-led group at £101.5m.
But yesterday Stonegate insisted this was a firm and final offer. It will go to Revolution shareholders next Tuesday.
The company said: “The licensed retail industry has faced a number of challenges over the past 12 months, many of which are likely to persist for some time. These include rising input costs, National Living Wage, the Apprenticeship Levy and the new rates regime. Late night business has also suffered from the uncertain consumer environment and increased licensing regulation.
“In this context, the Board of Stonegate recognises that scale, breadth and diversity of offer are increasingly important. As a result, Stonegate made a cash offer of 203p (the “Cash Offer”) for Revolution Bars on 24 August 2017. The Cash Offer represented a 62.4% premium to the undisturbed Revolution share price on 28 July 2017 and was significantly ahead of research analysts’ target prices on that date. The Cash Offer was recommended by the Board of Revolution and was supported at the time by Revolution’s largest shareholder. Since the announcement of the Cash Offer the environment remains tough and input costs continue to rise faster than consumer demand in the industry. Revolution’s current trading statement in its preliminary results announcement on 3 October 2017 reflected this, noting that September trading, for the sector as a whole, has been disappointing.
“Unfortunately, commentators and research analysts have been distracted by an attempt by Deltic to force a hostile merger on terms that were attractive to Deltic’s shareholders, without Deltic offering any cash to Revolution shareholders.
Ian Payne, chairman of Stonegate, said: “We have always been disciplined in the prices we pay for acquisitions. We believe that 203p fully reflects the value of Revolution and the Board of Revolution agrees with us. We urge shareholders to vote in favour of our Final Cash Offer.”
