Speculation was growing today that pub and bar operator Stonegate could up its offer for Revolution Bars due to a rival proposal from Deltic nightclubs.
Brokers Peel Hunt and Canaccord both issued notes saying the Deltic equity proposal valued Revolution higher than Stonegate's cash offer.
Analysts at Peel Hunt said: "There is a case for equity offers being as attractive as cash offers, yet the board and its advisers are still recommending a 203p offer over a 314p offer."
Canaccord analysts suggested that Stonegate needed to add around 30p per share to its offer in order to compete.
Revolution's board has recommended an offer from Slug and Lettuce owner Stonegate Pub Company to shareholders, but its largest shareholder Artemis has already withdrawn support for the deal.
Deltic now has until the end of the day tomorrow to put forward an official offer. If it does so, this could disrupt the current timeline attached to Stonegate's offer, which is scheduled to go before a shareholder vote next Tuesday.
But Revolution issued a statement today saying it still had the same concerns as it has previously outlined over a possible merger with Deltic. These include the lack of guarantee that the enlarged group could deliver on financial targets and that the enlarged group would have a large debt burden.
The group also encouraged Deltic to make a cash offer rather than continuing with its merger proposal.
Non-executive director Keith Edelman said: “The board does not believe the pursuit of a merger with Deltic is in the best interests of the company or its shareholders and, in the absence of a firm cash offer from Deltic, maintains its unanimous recommendation that shareholders should vote in favour of Stonegate’s offer at the revolution shareholder meetings on 17 October 2017.”
Deltic was formed from the ashes of Luminar, which went into administration in 2011. It operates 65 nightclubs across the UK.
Stonegate meanwhile owns a portfolio of bar and pub brands including Yates, Walkabout, and Slug and Lettuce, spanning over 690 sties.
Revolution has more than 60 bars and floated on the junior market in 2015.