US private equity firm Fortress has increased its takeover bid for cafe bar business Loungers after pushback from investors.
Fortress Investment Group said it has now made a 325p-per-share offer to buy the fast-growing hospitality chain, in a move which would value it at £354.4 million.
It represents an uplift from the previous 310p-per-share move, which had valued the company at around £338 million.
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
Directors at the business had supported the initial takeover proposal in November by the US owner of Majestic Wines.
On Wednesday, Loungers pushed for investors to agree to the new offer, stating that executive chairman Alex Reilley and chief executive Nick Collins would “find their positions untenable” if shareholders voted against the sale.
It comes after reports in The Times that a number of significant shareholders, including Slater Investments and AXA Investment Managers, had indicated they would vote against the deal.
Mark Slater, whose firm Slater Investments owns a 10.4% stake in the casual dining chain, told the newspaper “it’s the wrong time to be trying to sell”.
Fortress stressed on Wednesday that its increased bid was its final offer to buy the company.
Mr Reilley, executive chairman of Loungers, 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, managing director of Fortress, said: “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.”
Shares in Loungers moved 4% higher on Wednesday afternoon.
