Stonegate’s £101.5m plan to purchase Revolution seems to be back on track as rival Deltic Group’s latest advances have been rejected by the bar operator.
Revolution Bars Group today rejected Deltic’s proposal to take control, with a 35% share of the business, allowing Revolution shareholders to retain a 65% share. Revolution said it has concerns over both the value and deliverability of Deltic’s proposals.
It added that it considered there to be ‘no certainty or guarantee that the Deltic management team would be able to deliver either their forecast financial performance or the estimated cost synergies of the enlarged group’ presented in its proposal.
However, Revolution added that it encourages Deltic to make a cash offer for the business rather than continuing to focus on its current merger proposal.
‘The board does not believe that the pursuit of a merger with Deltic is in the best interests of the company or its shareholders and, in the absence of a firm cash offer from Deltic, maintains its unanimous recommendation that shareholders should vote in favour of Stonegate’s offer at the Revolution shareholder meetings on 17 October 2017,’ said Keith Edelman, the non-executive chairman of Revolution.
‘The board has made a considerable effort to ensure that Deltic has been provided with (and continues to have) access to due diligence materials and to Revolution’s management team, to enable Deltic to work towards formulating either a merger proposal which would credibly deliver significant value for Revolution shareholders or a cash offer for the company in excess of the recommended cash offer of 203 pence per Revolution share from Stonegate,’ said a statement from Revolution Bars Group.
‘Substantial amounts of information have been provided to Deltic in the seven-week period since 19 August 2017, when Deltic was first provided with access to due diligence materials by Revolution.’