Cosy Club owner Loungers snapped up by Fortress for £338m
The Loungers board has backed an offer from Fortress Investment Group which values the bar group at £338m.
Fortress will offer 310p per share, which is a 30 per cent premium to Loungers’ closing price yesterday and above its highest ever trading price.
Shares in the Cosy Club and Brightside operator “failed to adequately reflect (its’) positive business performance to date,” Fortress said.
The deal is the latest example of a cheap London-listed firm being snapped up by foreign investment firms in hunt for a bargain.
Alex Reiley, chair of Loungers said: “We remain very confident about Loungers’ future prospects and the half year results that we announced separately today clearly demonstrate the strong momentum that we have in the business”.
“We are more ambitious than ever and we see Fortress as being an ideal partner to help us take Loungers into the next phase of its growth journey.
“We believe that the acquisition represents a compelling proposition for all of our stakeholders and will allow us to execute our ambitious growth plans even more decisively and effectively,” he added.
In its interim results, Loungers delivered a 51 per cent increase in pretax profit, as revenue rose 19 per cent.
Fortress, which owns Majestic Wines and Poundstretcher, said it was “supportive of Loungers’ existing strategy” and holds the management team in “high regard”.
“Fortress brings to the table a successful track record of investing in consumer-focused businesses across the globe, particularly in the UK,” Domnall Tait, managing director at Fortress said.
“Today’s announcement further strengthens Fortress’ commitment to the UK market, and to being a responsible steward of and investor in UK businesses,” he added.