Revolution Bars has agreed to a £101.5m takeover offer from Slug and Lettuce owner Stonegate Pub Company, but rival nightclub operator Deltic hasn't given up just yet.
Deltic said today Stonegate had undervalued Revolution and said it was weighing up making its own cash offer, and Revolution shares are on the rise this morning, up 11.71 per cent.
Last week, Deltic announced that Revolution Bars had shrugged off an approach for an all-share merger that would result in Deltic's management taking control of the firm, and today Revolution went ahead with the announcement that it had agreed to a 203p per share takeover bid from Stonegate, that values Revolution at around £101.5m.
Revolution's board of directors have been advised by Numis so far, and said they considered the terms of the offer "to be fair and reasonable".
Keith Edelman, non-executive chairman of Revolution, said Stonegate was "an experienced operator" in the sector and understood his firm's ethos.
We believe that the offer from Stonegate represents an attractive and certain value in cash today for Revolution Shareholders, reflecting the high quality of the business, its people, market position and future prospects.
Only, Deltic made a separate announcement this morning saying it hadn't put off just yet, and was in the process of undertaking due diligence "with a view to formalising its possible merger proposal". It's mulling throwing a cat amongst the pigeons with a cash offer it thinks could be more appealing to Revolution's board.
Stonegate, which is the UK's fourth-largest managed pub firm, said its offer represents a 62 per cent premium compared to Revolution's share price before news of bid negotiations were announced, but Deltic says the offer "significantly undervalues Revolution".
Deltic said it will make a further announcement "in due course", though it said in the meantime, there can be no certainty that an offer will be made.
Still, the prospect of a bidding war has done wonders for Revolution's shares, sending them nearly 12 per cent higher in morning trading to 207.75p.