Nightcap PLC (AIM:NGHT) said it will not pursue Revolution Bars Group PLC any further after its takeover proposal was rejected earlier this week.
The Cocktail Club and Dirty Martini owner expressed its disappointment in a statement on Thursday, saying there had been encouragement from both Revolution and its own shareholders, and it invested significant time and resources to explore the possible offer.
Revolution said on Tuesday that its legal advisers suggested Nightcap's proposals would throw a screwdriver in the works of its restructuring as funding would not be in place in time for a planned relaunch, with necessary due diligence adding more time and therefore a large extra dash of risk.
Nightcap's board disagreed, saying their proposal presented "an improved outcome" for Revolution Bars' shareholders and a "significantly de-leveraged position" for its creditors and "at no point did Nightcap receive legal advice to suggest that this non-binding proposal was not capable of being delivered".
Nightcap added that its proposal would have replaced Revolution's "highly dilutive" £12.5 million fundraising announced last month by a merger of the two businesses, "allowing for Revolution Bars' shareholders to suffer less dilution and achieve more value from their investment".
Having completed five acquisitions in the past three years, Nightcap believes it is "very well placed" to continue executing its consolidation strategy of the late-night sector strategy.
It expects more opportunities for M&A to continue this year as the sector moves "to a fundamental structural transformation" as many of the operators are going through significant change.