Judith Mackenzie, a partner at fund manager Downing, which has a 1.5% stake in the all-day café and restaurant group, told the Daily Mail the attempt to buy Loungers was ‘opportunistic’.
“We are furious about this,” she said.
Meanwhile, Gresham House said it would use its near 4% stake to ‘vote against this transaction’.
They join Slater Investment and AXA Investment Managers, which own more than 10% and 4% of shares, respectively, and voiced their intention to reject the takeover last week.
Loungers is set to be acquired by US-based investment firm Fortress in a deal that values the 280-strong group at approximately £338.3m.
Under the terms of the acquisition, each Loungers shareholder will be entitled to receive 310p in cash for each share, with an alternative option to participate in an unlisted share alternative in respect of some or all their Loungers shares.
The cash offer represents a premium of approximately 30.3% to the closing price of 238p per Loungers share on 27 November 2024.
Not all shareholders have come out against the deal, with Canaccord Genuity Asset Management signing a non-binding letter of intent to vote in favour of the acquisition in respect of, in aggregate, 1,755,500 shares, representing approximately 1.7% of the existing issued ordinary share capital of Loungers.
According to the Daily Mail, a total of 41.9% of voting shareholders have so far signalled approval of the deal.
Peter Martin, industry commentator and contributing editor to MCA, Restaurant’s sister site, said the deal makes ‘perfect sense’ for management and shareholders.
He noted Loungers’s ‘languishing’ share price, which he said failed to reflect the real value and potential of the business.
“This gives everyone a way out and with a healthy premium on the current stock market valuation – as well as giving management the platform to continue to grow at pace,” he said.
“Both Loungers core brands, Lounge and Cosy Club, have great potential – they’re well-positioned as the all-day offer outside of London and with plenty of locations still to go after.”
Loungers, whose portfolio also includes the Brightside brand, reported total revenue in the 24 weeks to 6 October 2024 of £178.3m, up 19.2% on the previous year (£149.6m).
Adjusted EBITDA rose 25% to £29.8m (2023: £23.7m) while pre-tax profits reached £5.95m, a rise of 51.3% on the previous year.
In a trading update in early October, the group said it was ‘continuing to outperform the broader UK hospitality market’.
Loungers opened a record 36 sites in its most recent financial year across its three brands, and, according to Fortress, the group’s directors expect to continue to open around 36 new sites per annum.
