Judith MacKenzie, head of Downing Fund Managers, which owns a 1.56% stake in Loungers, told the Daily Mail that Fortress was just ‘paying lip service’ to improving the bid.
“It is not good enough,” she said.
This week Fortress put forward what it has described as an ‘increased and final cash offer’ for Loungers of 325p per share, a premium of approximately 4.8% on its previous proposal of 310p.
The offer raises the value of the group, whose portfolio includes the Lounge, Cosy Club and Brightside brands, from approximately £338.3m to £354.4m.
Downing was one of several shareholders to hit out against the original offer, which was put forward back in November.
Commenting on the increased offer, MacKenzie described it as ‘paltry’.
“[Fortress] need to sharpen their pencils again,” she continued.
MacKenzie added that Downing would consider backing a bid of between 360p per share and 380p per share.
‘They are miles away,’ she said.
Loungers shareholders will vote on the ‘increased and final offer’ on 30 January.
The group has warned that if the acquisition were to fail to complete and was voted down by shareholders, both chairman Alex Reilley and CEO Nick Collins would find their positions untenable.
Commenting on the increased offer earlier this week, 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.”
