Stonegate has declared its £101.5 million cash offer for Revolution Bars, despite pressure from rival bidder Deltic who announced on Tuesday it was stepping away from a potential deal.
Stonegate, which operates over 700 pubs across the UK, has said it had ‘built its business by being a disciplined buyer of pubs and pub estates’ and was ‘not willing to depart from the acquisition discipline that has made it successful’.
It said challenges within the licensed industry, including rising costs, the National Living Wage, business rates, and the Apprenticeship Levy over the last 12 months had not subsided since its offer was made on 24 August, and were likely to persist for some time, with input costs set to rise faster than consumer demand.
‘We have always been disciplined in the prices we pay for acquisitions,’ Ian Payne, chairman of Stonegate said. ‘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.’
Addressing a rival bid from nightclub operator Deltic, Stonegate’s statement released yesterday said: ‘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.’
Deltic issued its statement of intention not to make an offer on 10 October, after pursuing several revised merger proposals, saying it was not possible to gain the ‘full engagement and agreement of the directors of Revolution’. It had offered a model where Revolution shareholders would own 65% and Deltic 35% of the ‘Enlarged Group’. However, the Revolution board rejected its proposal, saying it was seeking a cash offer.