Perhaps Revolution Bars' (RBG) drastic share price fall has made it more susceptible to takeover offers. Stonegate Pub Company has made a possible offer for the bar group at 200p cash per share, the same price that Revolution Bars listed at in 2015. This values the company at £100m. That's a 60 per cent premium to the closing share price on the day the offer was announced, but a 15 per cent discount to Revolution’s 12-month high.
Stonegate is the UK’s largest privately owned managed pub company with more than 690 locations and already owns a number of different chains including Slug and Lettuce, Yates’s and Henry’s Café Bar. In March this year it completed a £595m refinancing to help fund its dual strategy of investing in existing locations, along with making acquisitions. Some of its most recent deals include the purchase of Walkabout Bars operator Intertain in December last year, and packages of pubs from JD Wetherspoon and Faucet Inns in February.
At the end of May, Revolution suffered a 40 per cent fall in its share price after management admitted that a number of cost headwinds, including the new apprenticeship levy and an above-inflation increase in business rates, would weigh on the business more than previously expected. Some of its Latin American-themed Revolucion De Cuba bars that opened last year have also taken longer than usual to mature. They are not likely to become profitable until years two or three. Full-year profits are expected to be flat on 2016. However, in its July pre-closing trading statement the bar group reported total sales were up 9 per cent to £130m during this financial year, while like-for-like sales were up 1.5 per cent.
