UK – Café-bar and restaurant chain Loungers has formally accepted an all-cash takeover proposal from investment management firm Fortress Investment Group worth £338.3 million ($426.6 million).
The acquisition of Loungers Plc by Fortress Investment Group is set to conclude in the first quarter of 2025 through a court-sanctioned scheme of arrangement.
Fortress, using its newly formed investment vehicle CF Exedra Bidco, has proposed to acquire the UK-based hospitality chain, which operates 290 sites under the Lounge, Cosy Club, and Brightside brands.
Based in New York City and managing assets worth US$ 48 billion, Fortress has offered 310 pence per share, representing a 30% premium over Loungers’ closing price of 238 pence.
The deal values Loungers’ equity at GBP 338.3 million and its enterprise value, including debt, at GBP 350.5 million (US$445.6 million), as reported by Alliance News.
Loungers’ board has unanimously endorsed the acquisition, with 40% of shareholders committing their support through irrevocable undertakings. Co-founder Alex Reilley expressed confidence in the partnership with Fortress, noting that it aligns with Loungers’ vision for the next phase of growth.
He highlighted that the acquisition offers significant benefits for stakeholders and will help the company execute its ambitious expansion plans more effectively.
Fortress, which is majority-owned by Mubadala Investment Company, has prior experience investing in UK businesses, including Majestic Wines.
Domnall Tait, Managing Director of Fortress, emphasized Loungers’ strong and differentiated market position. He commended the company’s directors for driving growth in locations, same-store sales, and revenues, even amid broader challenges in the hospitality industry.
Additionally, Bidco has received a non-binding letter of intent from Canaccord Genuity Asset Management, representing 1.7% of Loungers’ issued share capital as of November 28, 2024, to support the acquisition.
However, The Timesreported that two major shareholders, Slater Investments and AXA Investment Managers, are expected to oppose the deal.
This development follows the announcement that CF Exedra Bidco and Loungers Plc have agreed on the terms of a recommended cash acquisition of the company’s entire issued and to-be-issued share capital.
If finalized, the deal will enable Fortress to strengthen Loungers’ position in the market and drive its growth strategy forward.
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