Nightcap abandons pursuit of Revolution Bars

Revolution said the rescue proposal by Nightcap was "incapable of being delivered" and that it would press ahead with a £12.5m fundraising.

"Nightcap respects that the board of Revolution Bars wish to pursue a different outcome and as a result Nightcap today confirms that it does not intend to make an offer for the entire issued and to be issued share capital of Revolution Bars," it said.

Nightcap expressed disappointment, however, noting that there had been "encouragement" by both Revolution Bars shareholders and its own shareholders, and that it had invested "significant" time and resources to explore the possible offer.

It said the proposal presented an improved outcome for Revolution shareholders and a significantly de-leveraged position for its creditors.

"A non-binding proposal was submitted to the board of Revolution Bars on 17 May 2024 which, the board of Nightcap believes, presented an improved outcome for Revolution Bars' shareholders and a significantly de-leveraged position for its creditors," Nightcap said.

"At no point did Nightcap receive legal advice to suggest that this non-binding proposal was not capable of being delivered. The non-binding proposal did not include a fixed fundraising amount as Nightcap did not receive detailed financial information to help identify the cash requirements of Revolution Bars and the enlarged business until 21 May 2024."

In addition, Nightcap said the possible offer would have seen Revolution Bars' "highly dilutive" £12.5m fundraising - announced on 10 April - replaced by a merger of the two businesses, "allowing for Revolution Bars' shareholders to suffer less dilution and achieve more value from their investment".

Dan Coatsworth, investment analyst at AJ Bell, said: "Putting two weak things together doesn’t make a strong entity - it merely doubles the problem. That was the situation when Nightcap tried to buy Revolution Bars, a deal which has now collapsed after pushback from the latter.

"Both companies are experiencing difficult trading caused by a mixture of consumers struggling in a higher interest rate environment and younger people frequenting late-night bars less often because many aren’t interested in guzzling endless pints of beer or loading up on cocktails.

"The deal looked doomed from the start because Revolution Bars was already sorting out emergency fundraising to keep the lights on and the Nightcap offer would have scuppered that lifeline."