Revolution Bars rejects Nightcap takeover proposal

(Sharecast News) - Revolution Bars said on Tuesday that it has rejected a rescue deal by Nightcap as it is "incapable of being delivered" and that it will press ahead with a £12.5m fundraising. The AIM-listed bar operator announced earlier this month that it had held "an exploratory meeting" with Piano Works owner Nightcap about a range of possible transactions, including a potential takeover.

Since then, Revolution has had several meetings and phone calls with Nightcap to discuss its interest in making an offer for the company.

On 17 May, Revolution received a non-binding proposal from Nightcap. This proposal would still require Revolution to proceed with the restructuring plan, but not the existing fundraising of £12.5m.

"However, following legal advice, the board has concluded that the Nightcap proposal is incapable of being delivered, which was communicated to Nightcap last week," it said.

"There were a number of challenges to the delivery of the Nightcap proposal, which was a highly conditional proposal and which was subject to multiple equity fundraisings by Nightcap, assumptions regarding the support of the company's and Nightcap's respective lenders, material due diligence, as well as significant time, material cost and potential untested legal and procedural issues."

Among the challenges, Revolution pointed to the fact the Nightcap proposal would require two separate equity fundraisings to successfully complete.

"The board notes that, should the restructuring plan proceed and be sanctioned by the Court, it would preserve value for the company's current shareholders by comparison to the offers received from the M&A process which provided no equity value, whilst acknowledging the dilutive effect of the fundraising for those shareholders who have not participated in its pro rata to their current shareholdings," it said.