TGI Fridays UK operator drops US parent buyout plan
Hostmore expects to delist following the sale of its corporate restaurants.
TGI Fridays UK operator Hostmore plc announced that it is no longer actively pursuing the acquisition of TGI Fridays, Inc. after a key development in TGI Fridays' corporate structure impacted the potential deal.
According to Hostmore, the acquisition was initially appealing due to the predictable royalty stream generated by TGI Fridays' franchise agreements. However, the trustee of TGI Fridays' corporate securitisation terminated the company as manager of TGIF Funding LLC, which controls the franchise royalties. This loss of control over a key revenue stream led Hostmore to halt acquisition talks.
Meanwhile, The sale process for Hostmore's corporate stores, first announced in early August, has entered an advanced stage. Despite several formal bids, Hostmore expects the sale to generate less than the par value of borrowings secured by its trading subsidiary, Thursdays (UK) Limited. As a result, Hostmore is unlikely to recover significant value from its ownership of Thursdays.
The sale is expected to conclude in late September, with Thursdays continuing to operate its existing stores normally until then.
Hostmore plc, as the listed non-trading holding company, is likely to be wound up and delisted following the sale process. TGI Fridays in the UK will continue operations under new ownership.
