Nightclub operator Deltic Group has revealed a three per cent stake in Revolution Bars Group, hinting that a prospective merger is still on the cards.
The stake disclosure comes after a period of considerable back and forth with Deltic pursuing a tie-up with the bar chain.
Deltic, which operates clubs under brands such as Pryzm and Cameo, has been undeterred in its pursuit of a merger, despite initially being rebuffed by Revolution, with the firm saying in August it "did not see any merit" in Deltic's initial proposal.
The nightclub operator still wasn't put off by the deal then agreed between Revolution and Slug and Lettuce owner Stonegate Pub Company. Deltic said Stonegate had undervalued Revolution and it then waded in with its own all-share proposal.
Revolution had initially agreed to a £101.5m takeover offer made by Stonegate, with Revolution's board of directors saying 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.
But the offer was rejected by shareholders at the end of last month.
Analysts at Peel Hunt noted Deltic's estimations of a merger with Revolution would result in a combined business generating £40m of earnings before interest, tax, depreciation and amortisation.
In a note this week, they said this brings two major benefits: increased scale and market presence, and "strong growth, bolstered by merger synergies".
While the integration could take longer than if undertaken by Stonegate, and there will be exceptional costs associated with any deal, Peel Hunt said: "Neither of these points are a concern in our view, and not a game changer to the decision."
But analysts add that time is ticking. If Revolution is to merge with Deltic, "the longer it delays engaging, the greater the risk that terms shift in Deltic's favour", they added.
Last month, Revolution reported that pre-tax profits for the year ended 1 July, had dipped to £3.6m from £5.1m in 2016, though like-for-like sales rose 1.5 per cent.