REG - Hostmore PLC - Business Update

HostmoreAnnouncement

09/09/2024 07:00

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RNS Number : 3324D  Hostmore PLC  09 September 2024

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INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
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JURISDICTION.

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

9 September 2024

Hostmore plc

Business Update

Further to its announcement on 6 August 2024, Hostmore plc (the "Company" and,
together with its subsidiaries, the "Group"), is providing an update to the
market.

Acquisition of TGI Fridays, Inc.

The Board has continued to work to reach binding terms regarding the proposed
all-share acquisition (the "Acquisition") of TGI Fridays, Inc. ("TGI
Fridays"). However, the Board has now confirmed with TGI Fridays that the
trustee of TGI Fridays' corporate securitisation terminated TGI Fridays as the
manager (the "Termination") of TGIF Funding LLC ("TGIF Funding"), which is the
company subject to the corporate securitisation. TGIF Funding holds legal
title to the franchise agreement royalties and other various fees and revenue
from intellectual property of the TGI Fridays business. While TGI Fridays
remains the owner of the residual interest in TGI Funding, the Termination
compromises the control over the royalty stream of TGI Fridays and also
potentially impairs the future revenue of the business. The predictable and
highly cash generative royalty stream of TGI Fridays was the primary
attractive feature for the Group in pursuing the Acquisition.

Following the Termination, the Acquisition is no longer being actively
pursued. However, TGI Fridays and the Group agree that each is open to
re-engaging discussions if circumstances warrant.

Sale Process Update

The sale process for the Group's corporate stores announced on 6 August 2024
has now reached an advanced stage. A full process was undertaken with outreach
conducted to a long list of potential acquiring parties. Several formal bids
were received and over recent weeks discussions have been held with the
leading bidders to assess and improve their bids.

The present indications from the leading bids are that the consideration for
the store sale will be lower than the par value of the borrowings currently
secured by the Group's trading subsidiary, Thursdays (UK) Limited
("Thursdays"). Accordingly, it is unlikely that the equity owner of Thursdays,
being the Company, will recover any meaningful value for its ownership.

The sale process is expected to complete in late September; however, Thursdays
continues to operate normally and all existing stores remain open.

It is the Board's present expectation that the Company (Hostmore plc), being
the listed non-trading holding company of Thursdays, will be wound up and
delisted contemporaneous with the conclusion of the sale process, as TGI
Fridays in the UK will continue its operations under new ownership.

Strategic Review Update

In addition to the sale process for the Group's corporate stores, the Board
undertook a Strategic Review with advisers to evaluate other potential options
to secure value for the Group. The Strategic Review has now completed and
confirmed that none of these potential options, individually or collectively,
is presently likely to provide value to the Group. However, the Board will
continue to actively explore other potential options in response to events and
will proactively pursue any opportunities that become available.

Trading Update

As announced on 6 August 2024, sales for the first three weeks of July
declined 23% on a like-for-like ("LFL") basis compared to the same period in
2023. The same factors affecting the sector in July continued into August,
namely persistent warmer weather than the comparative period in 2023 and
underlying weak consumer spending.

The Group's year-to-date LFL sales remain at a decline of 12% compared to the
same period in 2023, with August performing better than July and the first two
trading weeks of September showing further improvement, with LFL sales at a
decline of around 9% compared to the same period in 2023.

 

The person responsible for releasing the announcement is Matthew Bibby, CFO of
Hostmore plc.

 

ENDS

Enquiries

Hostmore plc

Matthew Bibby, Chief Financial Officer

Tel: +44 (0)330 460 5588

Email: enquiries@hostmoregroup.com (mailto:enquiries@hostmoregroup.com)

 

DGA Group

Jonathon Brill, James Styles

Tel: +44 (0)20 7664 5095

Email: Hostmore@dgagroup.com (mailto:Hostmore@dgagroup.com)

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