Fortress increases final offer in Loungers deal
Under the new terms, shareholders will be entitled to 325 pence per share in a deal that will be worth around £354.4m.
US investment firm Fortress has increased its offer in a prospective deal to acquire Loungers Plc.
Under the terms of the increased and final offer, Loungers shareholders will be entitled to 325 pence in cash per scheme share in a deal that will be worth around £354.4m.
This suggests that the company's enterprise value is £366.6m, approximately 4.8% higher than the original offer of 310 pence per share.
An 'even more compelling' offer
The revised price stands at a 37% premium on Loungers' share price of 238 pence at Tuesday's market close, representing a 36% increase on the average share price of 239.2 pence in the year to November 27 – the last business day before the original announcement date.
Share prices for Loungers – which owns and operates café-bars, restaurants and roadside dining venues across the UK – surged 3.9% to 320 pence each on Wednesday morning (15 January), following the announcement.
Loungers' most recent financial update cites strong results for the 24 weeks ended 6 October 2024. It reports revenue growth of 19.2% at £178,327, highlighting a like-for-like sales growth of 4.7%, while profit before tax was £6m (H124: £3.9m), up 51.3%. The group projects that it will end FY25 with 292 sites.
Commenting on the offer, Alex Reilley, chairman of Loungers, says: "We are very pleased that Fortress has decided to increase its offer, making it even more compelling for Loungers shareholders and reinforcing the Loungers directors' recommendation that they should vote in favour of the acquisition."
Domnall Tait, managing director of Fortress, adds: "This increased offer for Loungers reflects our continued belief in the business and its management team, and we look forward to supporting them through the next stage of growth. Notwithstanding recent challenges, Fortress remains a strong believer in the UK."
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