Hostmore to acquire TGI Fridays for £177m
The proposed transaction would be classified as a reverse takeover under the listing rules of the FCA
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Hostmore has reached an agreement for an all-share acquisition of TGI Fridays for £177m, including the business’ brand in the US which is the company’s franchisor.
The parties have agreed that the proposed transaction would result in existing Hostmore shareholders holding a 36% shareholding in the enlarged business upon completion, with TGI Fridays shareholders having a 64% shareholding in the combined group.
TGI Fridays primarily operates through franchising and licensing agreements in the US, as well as 43 international markets.
The proposed transaction, which is being negotiated on an exclusive basis and is subject to completion of confirmatory due diligence, would be classified as a reverse takeover under the listing rules of the FCA.
According to Hostmore, the combined group would have “significantly” increased scale, as well as improved strategic, operational and financial flexibility.
Once the acquisition is finalised, the group is expected to be renamed ‘TGI Fridays plc’, with its shares admitted to trading on the London Stock Exchange’s Main Market under.
Stephen Welker, chairman of Hostmore, said: “I am pleased to announce that we are in advanced discussions with TGI Fridays on the terms of a proposed transaction, which would reunite two businesses that are a natural fit, and were one business until as recently as 2014.
“Hostmore has made good progress in executing its turnaround strategy over the past year by reducing costs, revising our capital allocation policy to focus on debt repayment and shareholder distributions, and pursuing high ROI organic growth initiatives.”
Rohit Manocha, chairman of TGI Fridays, added: “Today marks an exciting moment for the next chapter of the TGI Fridays story, as we continue to drive forward our brand revitalisation strategy.
“Bringing together TGI Fridays with our leading franchisee partner in Hostmore, in our largest international market, the United Kingdom, has a compelling and highly complementary strategic logic to it.”
