Hostmore has reached an agreement to merge with TGI Fridays for £177m in an all-share deal.
Hostmore, which is a franchisee of TGI Fridays, will take a 36% shareholding in the enlarged business upon completion, with TGI Fridays shareholders holding 64% in the combined group.
The combined group will have revenue of around £490m, significantly increased scale, as well as improved strategic, operational and financial flexibility, said Hostmore.
Stephen Welker, chair of Hostmore, said: “This acquisition would give us the scale and flexibility to accelerate our existing strategy and enhance the financial outlook for Hostmore and scope for shareholder returns, while also strengthening our ability to provide an exceptional guest experience by harnessing our distinctive, trusted brand as the home of celebrations.”
TGI Fridays chair Rohit Manocha added: “Today marks an exciting moment for the next chapter of the TGI Fridays story, as we continue to drive forward our brand revitalisation strategy. Bringing together TGI Fridays with our leading franchisee partner in Hostmore, in our largest international market, the United Kingdom, has a compelling and highly complementary strategic logic to it.
“By joining forces with Hostmore, this would support our long-term organic growth strategy and enable us to better harness TGI Fridays’ global franchising and licensing infrastructure.”
TGI Fridays primarily operates through franchising and licensing agreements in the US and in 43 international markets. It also operates a network of company-owned stores in the US.
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