Nightcap’s pursuit of Revolution Bars falls apart

Plans for Nightcap’s possible offer for rival Revolutions Bars lay in tatters after it was concluded that Nightcap’s plans were unworkable.

After a series of meetings, Nightcap and Revolution Bars concluded that completing a deal was heavily reliant on additional fundraising rounds. Revolution Bars deemed these a bridge too far, given the current environment for the pubs and clubs industry and the wider equity market. 

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The UK’s bars and pubs scene has never quite recovered from the pandemic. It also faces worrying trends of people increasingly drinking at home and younger people drinking and going out to bars less than they used to. Younger people now tend to prefer attending the UK’s many festivals rather than spending time in bars. This favours neither Nightcap or Revolution Bars.

“Revolution Bars appeared to confirm suspicions that combining with Nightcap would just double the problems facing the two troubled night spot operators. It is striking to see a company say a bid is ‘incapable of being delivered’ and Revolution Bars continues to push shareholders to stick with its own restructuring plan,” said Dan Coatsworth, investment analyst at AJ Bell.

“The bigger issues, throbbing away in the background like an insistent beat, are the rising costs and waning demand faced by this end of the hospitality sector. Fewer younger people are in the habit of going out drinking on a regular basis, meaning late-night operators need to come up with new ways to keep people frequenting their outlets.”

Revolution Bars shares were down over 6% at the time of writing.

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