Shares in Revolution Bars Group PLC (LON:RBG) frothed higher on Thursday as the AIM-quoted bar chain agreed to a £101.5mln takeover from Slug & Lettuce owner Stonegate Pub Company.
Stonegate is offering 203p in cash to Revolution shareholders, a bid which has been recommended by the Revolution board.
“We believe that the offer from Stonegate represents an attractive and certain value in cash today for Revolution shareholders, reflecting the high quality of the business, its people, market position and future prospects,” said Revolution chief executive Keith Edelman in a statement.
“Stonegate is an experienced operator in this sector that understands Revolution's ethos with its unique premium bar offering.”
Deltic not giving up though
But Revolution shares headed up towards 210p this morning as investors seemed to be waiting on a possible rival offer coming in from PRYZM nightclub owner Deltic Group.
Earlier this month, Revolution dismissed the interest from Deltic, saying that it “did not see the merit” in pushing ahead with more in-depth talks.
But Deltic hit back today, claiming that Stonegate’s offer “significantly undervalues” the company and that it is currently undertaking the necessary due diligence ahead of formalising its own possible merger proposal.
Originally, Deltic was understood to be looking at an all-share merger but it confirmed in a statement this morning that it was now looking at the possibility of a cash offer.
It will update the market in “due course” about its plans, but reminded investors that there can be no certainty that an offer will be made.
The prospect of a bidding war has put some fizz into the Revolution share price today, with the stock up 11.9% to 207.8p.
--Updates for share price--