Revolution Bars Share Discussion Threads

[extrader] 29/8/2017 09:39

Hi QS99,

Under the Takeover Code, Deltic has 56 days from Stonegate's bid (made 24 August) to make a counter-offer, though it's told us it hopes to do so before then...

So presumably some time before 19 October

HTH

[qs99] 29/8/2017 08:51

wonder when we can expect, if at all, a counter bid?

[qs99] 25/8/2017 11:15

would like to think so....so £2.03 is downside, against possible decent double figure %s above current price, IMO not a bad risk/reward ratio...GLA and DYOR

[spot1034] 25/8/2017 11:14

Well they say that they believe the Stonegate offer 'significantly undervalues' RBG, so we can presumably expect any deal they come up with to be 'significantly' better.

[qs99] 25/8/2017 11:09

Good find, looks like from tone of that article that they will come back with something, just need to work out what people believe is "credible and achievable" also to be credibly above £2.03 to get people to sit up and notice and leave some in the pot for a further bid if Stonegate counter-offer...DYOR but let's guess at £2.20 from Deltic? Then counter-offer by Stonegate around £2.35? Could be another Lavendon, almost same prices !

DYOR and all above IMO!!

[aishah] 25/8/2017 11:05

Story of the Day:
Deltic boss – ‘We’re very much in the game when it comes to Revolution deal’

Deltic Group chief executive Peter Marks has told Propel his company is “very much in the game” in the battle for Revolution Bars Group. Marks said Deltic, the UK’s largest operator of premium late-night bars and clubs with 57 venues, was working hard to produce a counter deal after Revolution directors recommended shareholders accepted a £101.5m offer from Stonegate Pub Company. Deltic is considering making its own cash offer, although its preference remains a merger. Marks said: “I’m a great fan of Stonegate and its owner TDR Capital but we believe its offer still undervalues the company and synergies of Revolution. If there were to be a merger between Revolution and Deltic, Revolution’s shareholders would have the advantage of the synergies of both companies. We know we can offer a credible alternative to the Stonegate bid and it is now up to us to prove it. It is too early to tell which option we will take. However, if I were a Revolution shareholder I would want to see this counter proposition. We are very much in the game.” Under company takeover rules, Deltic has 56 days to put forward a formal offer to Revolution following the Stonegate bid. Marks said: “We don’t want to take that long but we have to come up with something that is both credible and achievable. We believe we have a good business and we’re on the up. We see a great future for the night-time economy that we’re keen to invest in it. When opportunities like this come along you have to explore them. Whatever happens with the deal, it’s nice to see interest in an attractive proposition such as Revolution – it’s a positive thing for the sector.” Deltic has just reported like-for-like sales have increased 3.85% so far in its current financial year. In the year to 25 February 2017 turnover increased 1.4% to £102.2m compared with £100.8m the year before. Underlying Ebitda was in line with the prior year at £13.3m

[crumppot] 24/8/2017 16:15

Agree that the market is saying there is likely to be a higher offer. Deltic must think they have chance, otherwise why would they waste their time with their announcement. There might be someone else that the market thinks might make a bid hence the price being higher than the Stonegate offer.

[dins1249] 24/8/2017 15:32

No matter what, with the bid at 2.03 and share price standing at 2.08, market is clearly saying there will be a higher bid and market is never wrong.

[davidosh] 24/8/2017 15:07

Do we know who the other potential bidders could be beyond Deltic ?

[ragehammer] 24/8/2017 14:52

JakNife, I agree, it does look a stretch for Deltic unless their shareholders can put fresh equity in and/or they can attract another equity partner, although as someone else pointed out, the clock is ticking.

There may also be other, as yet undeclared, trade buyers interested.

[geheimnis2] 24/8/2017 14:42

Good article by Paul Scott

[joe say] 24/8/2017 13:28

Love the fact that some of the irrevocable undertakings are in fact revocable

Disgusting use of the term imo - and something the FCA should address as clearly designed to confuse (else why hide in Annex 3)?

[cervin1] 24/8/2017 13:10

Paul Scott comments.

[twistednik] 24/8/2017 11:14

PS: this is what they're up against!

Barclays is providing a senior secured bridge-facility to back Stonegate’s £101.5 million recommended offer for Revolution Bars, according to a company announcement today.

TDR established Stonegate in 2010 to buy 333 pubs from Mitchells & Butlers. The firm is now seasoned bond issuer and was last in the market in March when it placed a dual tranche secured offering due 2022 of £405 million 4.875% notes and £190 million FRNs at L+437.5. This morning, the fixed rate tranche was largely steady in secondary at about 102.25.

Stonegate is rated B/B2 with a 3 recovery rating. At the end of 2016 the firm had 654 pubs under management making it the largest privately held managed pub company in the U.K. The group is headquartered in Luton and its formats include Slug and Lettuce, Tattershall Castle, Henry’s and Yates’s.

[ragehammer] 24/8/2017 11:10

twistednik, there's also the question of synergies. Much of the central costs of RBG in its current form could be eliminated, thus boosting profitability and cash generation even more.

[twistednik] 24/8/2017 11:06

Rage, it's a fair point but the cash generation / EBITDA of the combined business would still not get them close to being able to raise the debt required to buy RBG.

The question is then, who are the shareholders of Deltic and are their pockets deep enough to be able to stump up the equity !?

[ragehammer] 24/8/2017 10:47

It's not about Deltic being able to borrow £100m based on their own accounts, this is an LBO situation so you would need to look at combined businesses' accounts.

RBG is highly cash generative, in FY16 RBG had FCF of £9.1m (including only maintenance capex, per their results presentation) and the H1 17 FCF was £3.8m compared to H1 16 which was £1.6m on the same basis (more than 100% growth). RBG is also unencumbered with debt.

[crumppot] 24/8/2017 10:29

Well you might be right looking at the acs but the share price indicates that another offer might be on the horizon....

[kmann] 24/8/2017 10:26

its clear the bid is 240p

[barnetpeter] 24/8/2017 10:12

Sold half my remaining holding for 208p. I don't see Deltic having the cash or if they can raise it I guess it wont be more than 210p.

[crumppot] 24/8/2017 09:52

Deltic have known that Stonegate would pay 200p so there was no point in making an announcement this morning unless they thought they had half a chance of succeeding with a better offer. Deltic know that their offer would have to be well in excess of Stonegate's as they are a much weaker company. I think we will see an offer from them and this will mean Stonegate will have to sharpen their pencil if they want to buy RBG!