Hostmore abandons acquisition of TGI Fridays’ US business
The board at Hostmore, parent company of TGI Fridays UK, abandoned the plans after the US group lost control of TGIF Funding, which holds legal title to the franchise agreement royalties and other various fees and revenue from intellectual property of the TGI Fridays business.
Hostmore said this would compromise the control over the royalty stream of TGI Fridays and also potentially impair the future revenue of the business, which was central to the transaction.
As a result, the acquisition is no longer being actively pursued, though both parties have left the door open for future discussions.
Hostmore announced back in April that it was pursuing an all-share reverse takeover of the US business for a value of £177m, which would have brought together TGI Fridays’ largest franchisee with the global franchisor.
As part of the takeover plans, Hostmore announced a sales process last month for TGI Fridays 87-strong estate of corporate sites in the UK, which it now says is in an ‘advanced stage’.
However, present indications from the leading bids are that the sale is expected to fall short of covering Hostmore’s debts, meaning shareholders are unlikely to recover ‘any meaningful value’.
As a result, Hostmore’s board expects the company to be wound up and delisted following the completion of the sale process later this month, with TGI Fridays in the UK continuing its operations under new ownership.
In the wake of the announcement this morning (9 September), Hostmore’s share price plunged by more than 90%.
As well as TGI Fridays UK, Hostmore’s portfolio also encompasses Fridays and Go, a fast casual offshoot of the TGI Fridays.
