Bar operator Nightcap has walked away from a possible rescue deal for rival operator Revolution Bars.
Nightcap said it was “disappointed” its merger proposal was rejected by the larger hospitality chain earlier this week.
Earlier this week Revolution Bars, which also runs the Revolucion de Cuba and Peach Pubs brands, rejected the proposed offer, warning it was “incapable of being delivered”.
In April, Revolution Bars Group announced a plan to restructure its business through an emergency fundraising, with plans to close 18 sites, with the Bournemouth bar closing at the end of April. It also launched a formal sale process as an alternative to the restructuring plan.
Separately from the formal sales process, Nightcap was considering acquiring some or all of Revolution’s sites, subsidiaries, assets or brands.
Revolution had said on Tuesday the non-binding proposal from Nightcap earlier this month did not include the proposed fundraising and would instead require two separate funding rounds from Nightcap.
Nightcap also said its offer did not include a fixed fundraising amount and “at no point did Nightcap receive legal advice to suggest that this non-binding proposal was not capable of being delivered”.
Nightcap, which runs 46 UK bars including the Cocktail Club and Dirty Martini chains, said its move would have seen the proposed £12.5 million fundraising replaced by a merger of the two listed firms.
It then proposed a fresh fundraising as well as the implantation of other parts of Revolution’s restructuring plan.
Nightcap said it also planned to sell Revolution’s Peach Pubs business.
The Sarah Willingham-led business said it will continue to access acquisition opportunities in the hospitality sector.
Nightcap said: “The board also believes that opportunities for further consolidation in the late night sector will continue to arise in the coming year as the sector moves from incremental M&A (merger and acquisition) activity to a fundamental structural transformation as many of the operators in the sector are going through significant change.”
It concluded that there was “significant procedural driven risk and cost associated with the Nightcap proposal over and above the level of risk that applies to the existing plan”.
It added that it remained open to further proposals from Nightcap or other firms.
Revolution Bars operates 58 bars and 22 bars under the Revolution, Revolución de Cuba and Peach Pubs brands.
