Fortress Investment Group said it has now made a 325p-per-share offer to buy the fast-growing hospitality chain
US private equity firm Fortress has ramped up its takeover bid for the café bar company Loungers following resistance from the firm’s investors.
Fortress Investment Group revealed their latest offer stands at 325p per share, which would value the growing hospitality business at £354.4m. This increased proposal follows a 310p-per-share bid, which had valued the company at around £338 million.
The leadership at Loungers had already thrown their weight behind an initial buyout pitch last November from Fortress, the US owner of Majestic Wines. On Wednesday, the chain pushed for its shareholders to accept the new terms.
They said that executive chairman Alex Reilley and chief executive Nick Collins would “find their positions untenable” if shareholders voted against the sale.
In recent reports by The Times, key investors such as Slater Investments and AXA Investment Managers have been vocal about their opposition to the sale, with some prepared to cast a vote against it. Mark Slater of Slater Investments, controlling a 10.4% share of the casual dining brand, conveyed his perspective to the paper, saying “it’s the wrong time to be trying to sell”.
Fortress said the enhanced bid represents their final offer to buy Loungers. Stating his satisfaction with the increased offer, Mr. Reilley said: “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, the managing director of Fortress, remarked: “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 the recent challenges, Fortress remains a strong believer in the UK.”
Following this news, shares in Loungers surged by 4% higher on Wednesday afternoon.
