NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE
TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION.
This announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and
is disclosed in accordance with the Company's obligations under
Article 17 of MAR.
9 September 2024
Hostmore
plc
Business
Update
Further to its announcement on 6
August 2024, Hostmore plc (the "Company" and, together with its
subsidiaries, the "Group"), is providing an update to the
market.
Acquisition of TGI Fridays, Inc.
The Board has continued to work to
reach binding terms regarding the proposed all-share acquisition
(the "Acquisition") of TGI Fridays, Inc. ("TGI Fridays"). However,
the Board has now confirmed with TGI Fridays that the trustee of
TGI Fridays' corporate securitisation terminated TGI Fridays as the
manager (the "Termination") of TGIF Funding LLC ("TGIF Funding"),
which is the company subject to the corporate securitisation. TGIF
Funding holds legal title to the franchise agreement royalties and
other various fees and revenue from intellectual property of the
TGI Fridays business. While TGI Fridays remains the owner of the
residual interest in TGI Funding, the Termination compromises the
control over the royalty stream of TGI Fridays and also potentially
impairs the future revenue of the business. The predictable and
highly cash generative royalty stream of TGI Fridays was the
primary attractive feature for the Group in pursuing the
Acquisition.
Following the Termination, the
Acquisition is no longer being actively pursued. However, TGI
Fridays and the Group agree that each is open to re-engaging
discussions if circumstances warrant.
Sale Process Update
The sale process for the Group's
corporate stores announced on 6 August 2024 has now reached an
advanced stage. A full process was undertaken with outreach
conducted to a long list of potential acquiring parties. Several
formal bids were received and over recent weeks discussions have
been held with the leading bidders to assess and improve their
bids.
The present indications from the
leading bids are that the consideration for the store sale will be
lower than the par value of the borrowings currently secured by the
Group's trading subsidiary, Thursdays (UK) Limited ("Thursdays").
Accordingly, it is unlikely that the equity owner of Thursdays,
being the Company, will recover any meaningful value for its
ownership.
The sale process is expected to
complete in late September; however, Thursdays continues to operate
normally and all existing stores remain open.
It is the Board's present
expectation that the Company (Hostmore plc), being the listed
non-trading holding company of Thursdays, will be wound up and
delisted contemporaneous with the conclusion of the sale process,
as TGI Fridays in the UK will continue its operations under new
ownership.
Strategic Review Update
In addition to the sale process for
the Group's corporate stores, the Board undertook a Strategic
Review with advisers to evaluate other potential options to secure
value for the Group. The Strategic Review has now completed and
confirmed that none of these potential options, individually or
collectively, is presently likely to provide value to the Group.
However, the Board will continue to actively explore other
potential options in response to events and will proactively pursue
any opportunities that become available.
Trading Update
As announced on 6 August 2024, sales for the first
three weeks of July declined 23% on a like-for-like ("LFL") basis
compared to the same period in 2023. The same factors affecting the
sector in July continued into August, namely persistent warmer
weather than the comparative period in 2023 and underlying weak
consumer spending.
The Group's year-to-date LFL sales
remain at a decline of 12% compared to the same period in 2023,
with August performing better than July and the first two trading
weeks of September showing further improvement, with LFL sales at a
decline of around 9% compared to the same period in
2023.
The person responsible for releasing
the announcement is Matthew Bibby, CFO of Hostmore plc.
ENDS
Enquiries
Hostmore plc
Matthew Bibby, Chief Financial
Officer
Tel: +44 (0)330 460 5588
Email: enquiries@hostmoregroup.com
DGA
Group
Jonathon Brill, James
Styles
Tel: +44 (0)20 7664 5095
Email: Hostmore@dgagroup.com