LONDON - Fortress Investment Group, through its affiliate CF Exedra Bidco Limited, has agreed to acquire Loungers (LON:LGRS) PLC, valuing the UK-based hospitality company at approximately £338.3 million. The acquisition, which will be executed via a scheme of arrangement, proposes a cash offer of 310 pence per share, marking a premium over recent trading prices.
The transaction, which values Loungers' entire issued and to-be-issued share capital, represents a 30.3% premium to the closing price on the day before the announcement. The offer also includes an alternative for shareholders to receive unlisted securities in the capital of CF Exedra Topco Limited, the ultimate owner of Bidco, instead of the cash consideration.
Loungers, known for its café bars and restaurants, has been on an expansion trajectory, with 280 sites across its brands as of the announcement date. The company's Chairman, Alex Reilley, expressed confidence in the future prospects and anticipated that partnering with Fortress would further accelerate growth plans.
Fortress Investment Group, managing assets worth approximately US$48 billion, has a history of investing in consumer-focused businesses, including in the UK's hospitality sector. Domnall Tait, Managing Director at Fortress, cited Loungers' strong performance and management's commitment as key factors in the decision to pursue the acquisition.
The Directors of Loungers, advised by Houlihan Lokey (NYSE:HLI), have unanimously recommended that shareholders accept the cash offer. However, they have not provided a recommendation regarding the alternative offer due to its variable impact on individual shareholders.
The acquisition is subject to customary conditions and regulatory approvals and is expected to be completed in the first quarter of 2025. The transaction is based on a press release statement, and further details will be provided in the forthcoming Scheme Document.
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