Achi news desk-
The reverse takeover would mean that Hostmore shareholders hold 36% of the larger business, with TGI Fridays shareholders holding 64%. It values ​​TGI Friday at £177m.
Shares in Hostmore closed up more than 4% at 18.75p on the news.
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The proposal comes as the hospitality industry continues to battle a cost of doing business crisis, with operators expressing concern over the impact of this month’s rise in the national minimum wage.
Hostmore floated on the London Stock Exchange in November 2021, as part of TriArtisan Capital Advisors’ final asset disposals of Electra, the UK-listed private equity group. TGI Fridays has been majority owned by funds managed by TriArtisan Capital Advisors LLC or its predecessor, TriArtisan, since 2014.
The company operates primarily through franchising and licensing agreements in the US and has 43 international markets; it also has a network of company-owned stores across the Atlantic.
Should the proposed deal win approval from shareholders and regulators, the combined company will be renamed TGI Fridays, with shares admitted to the main market of the London Stock Exchange.
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The larger group would have had an underlying revenue of around £497m for 2023, £306m from TGI Fridays and £191m from Hostmore. It would have around 680 stores (593 TGI Fridays, 89 Hostmore) and more than 8,800 employees (4,447 TGI, 4,380 Hostmore).
It is expected that the company would use the same governance structure as Hostmore, which means that the chairman, the senior independent director, and the chairmen of the board’s committees will continue in the same roles after the deal is completed. to end
Stephen Welker, chairman of Hostmore, said: “I am pleased to announce that we are in advanced discussions with TGI Fridays on the terms of a proposed transaction, which would bring together two businesses that are a natural fit, and were until recently one business. as 2014. Hostmore has made good progress in implementing its transformation strategy over the past year by reducing costs, revising our capital allocation policy to focus on debt repayment and shareholder distribution, and pursuing ROI (return on investment) organic growth initiatives ) high.
“I would like to thank Julie McEwan, our Chief Executive Officer, Matthew Bibby, our Chief Fire Officer, and their colleagues, both in store and at an operational level, for their tireless efforts to put Hostmore in a stronger position which has led to the possibility of this compelling strategic strategy. a transaction.
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“This acquisition would give us the scale and flexibility to accelerate our existing strategy and improve the financial outlook for Hostmore and the scope for shareholder returns, while also strengthening our ability to deliver an exceptional guest experience through harnessing our distinctive, trusted brand as a home for celebrations.
“We look forward to presenting our existing and new shareholders with the opportunity to participate in the significant value creation potential of the combined group moving forward.”
TriArtisan is a long-standing player in the restaurant sector, with investments in PG Changs, Hooters and 3C, as well as TGI Fridays.
