US investor increases bid for Loungers after shareholder revolt

The US private equity firm looking to buy Loungers has increased its bid for the restaurant and bar chain to £354.4m in response to shareholder pushback.

Fortress Investment Group has upped its original 310p per share offer it made in November to 325p per share.

It implies the enterprise value of the Cosy Club, Loungers and Brightside operator is approximately £366.6m.

Larger shareholders including Slater Investments and AXA Investment Managers had said they intended to vote against the deal with one telling the Times it was the “wrong time” to sell.

A statement from Loungers’ directors said executive chairman Alex Reilley and chief executive Nick Collins would “find their positions untenable” if shareholders voted against the sale.

They said the sale was the result of strategic discussions “aimed at addressing the failure of the Loungers share price to reflect the businesses’ strong operational performance”.

The directors said 2025 was “likely to be a challenging year for British consumers” as retail and leisure operators were forced to raise prices due to National Insurance and minimum wage increases and Loungers had rising costs it would need to mitigate.

Reilley said: “We are very pleased that Fortress has decided to increase its offer, making it even more compelling for Loungers shareholders and reinforcing the Loungers directors’ recommendation that they should vote in favour of the acquisition.”

Domnall Tait, managing director of Fortress, said: “This increased offer for Loungers reflects our continued belief in the business and its management team, and we look forward to supporting them through the next stage of growth. Notwithstanding the recent challenges, Fortress remains a strong believer in the UK.”

Loungers was founded in 2002 and operates around 280 locations under the Lounge, Cosy Club and Brightside brands.

Shareholders will vote on the sale on 28 January.