Lobbying, bar wars and flogging trainers
So many reasons to subscribe to our lively Rainmakers platform
On our Rainmakers platform this week we’ve looked at the lobbying efforts of the private equity sector, in particular to cosy up to Labour.
It’s a bit of a peek behind the scenes at who was involved, the key personalities and what the likely policy outcomes will be after the election.
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On Rainmakers before we’ve also looked in detail at the logic behind the JD Sports strategy, led by their CEO Regis Schulz (above).
Early in his tenure as CEO Schultz offloaded a whole bag of brands to Mike Ashley’s Sports Direct to play around with, including Scotts, Tessutti and Pretty Green, while he was determined to build JD globally.
As he told the World Retail Congress earlier this year: “When I joined, we were developing a lot by acquisition,” he said. “Let’s focus on one thing, let’s stop doing multiple things, and let’s really focus on JD as our first priority. That was the message – and it was more internal than external.”
In the light of their results announcement this morning, it’s worth looking at the piece again.
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News-wise, there’s a bit of fun and games with Revolution Bars Group, the troubled AIM listed bar operator, which this week has ended the formal sales process.
In a statement to the stock market, the operator of Revolution, Revolucion de Cuba and Peach Pubs brands said: “The full sales process did not result in any proposals being made relating to the acquisition of the entire issued and to be issued share capital of the Company. The Board confirms that it is not in receipt of any approaches for the Company at the date of this announcement.”
It admitted that several proposals were received for “certain of its subsidiaries and/or business and assets owned” but said none of the proposals would have resulted in a financial return to shareholders.
This week the board has traded barbs with rival operator Nightcap, which proposed a merger that Revolution dismissed as “incapable of being delivered.”
For its part Nightcap, which owns 46 bars, mainly in London, but also Dirty Martini in Manchester and Tonight Josephine in Liverpool, said that with five acquisitions in just over three years it is “very well placed to continue executing on its consolidation strategy”.
It said: “Opportunities for further consolidation in the late night sector will continue to arise in the coming year as the sector moves from incremental M&A activity to a fundamental structural transformation as many of the operators in the sector are going through significant change.”
On Tuesday Revolution dismissed Nightcap’s plan as “highly conditional” and said that as the proposal was subject to multiple equity fundraisings by Nightcap, it would take too long.
Instead Revolution said it was pursuing a twin track rescue and restructuring deal with £3m of backing from entrepreneur Luke Johnson, £3m from the Robus Recovery Fund II and £3.5 million from three key existing shareholders.
But the Nightcap statement also reveals frustration with the Revolution Bars board and the way the negotiations took place.
“The company engaged in discussions with Revolution Bars and invested significant time and resources to explore the possible offer. A non-binding proposal was submitted to the board of Revolution Bars on 17 May 2024 which, the board of Nightcap believes, presented an improved outcome for Revolution Bars' shareholders and a significantly de-leveraged position for its creditors.
“At no point did Nightcap receive legal advice to suggest that this non-binding proposal was not capable of being delivered. The non-binding proposal did not include a fixed fundraising amount as Nightcap did not receive detailed financial information to help identify the cash requirements of Revolution Bars and the enlarged business until 21 May 2024.”
Instead the process has now turns to a restructuring plan to amend and extend lending facilities, exit the leases of loss-making sites, and seek rent reductions on other certain other sites to enable them to return to profitability at a sustainable level, which the board says would be a £3.8 million improvement in EBITDA in FY25).
The alternative, it warns, is administration as the company is forecasted to need £0.7m by 24 August 2024 and £8.1 million in the week ending 7 September 2024.
“In those circumstances, it is expected the directors of the Plan Company and certain other Group entities would file for administration to comply with their directors' duties obligations and to protect the interests of creditors,” the statement says.
A letter will today be sent to all creditors affected by the Restructuring Plan and explains what would likely happen if the Restructuring Plan were not sanctioned by the Court by 15 August 2024.
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OUR NEXT RAINMAKERS EVENT
Our next Rainmakers lunch will feature special guest Ruth Percival, above, CEO of Contollo Group, a buy and build consultancy group backed by private equity investor NorthEdge, a deal that also made the shortlist for this year’s Rainmakers awards.
We’re giving subscribers to Rainmakers discounted tickets for this event, which you can register for here by using the discount code: SUBSCRIBER5
As she embarks on this new venture, this seasoned leader with extensive expertise in the corporate finance, power/energy, and healthcare sectors, will share her strategic ambitions for Contollo and the lessons learned from her impressive track record of leading multi-disciplinary teams across diverse professional service disciplines including commercial/sales and operational/service delivery roles.
She describes her leadership as values-driven, emphasizing integrity, kindness, and collaboration.
Her latest venture, Contollo is a progressive new consultancy that works with commercial developers to offer consulting services in Cost Management and MEP, with particular expertise in smart buildings.
As reported on TheBusinessDesk.com at the time, Contollo made its first acquisition in February 2024 to acquire Abacus, a Manchester-based cost management consultancy which has worked for Vita Student Living, Sunderland AFC and Bolton Wanderers FC.
Contollo sees Ruth once again working alongside entrepreneur Oliver Dennis, as she did at medcomms consultancy group Fishawack.
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