Loungers is set to be acquired by US firm, Fortress Investment Group, for a cash consideration of £338.3m.

The hospitality firm, which owns brands including Cosy Club and Brightside, has accepted the bid which equates to 310 pence per share, representing a 30% premium on its closing price on Wednesday.

Fortress said that the offer recognises that Loungers’ portfolio resonates "strongly with the UK consumer", noting its ability to grow from one brand and one site in 2002 to three brands and 280 sites as of 27 November 2024.

The US-based firm has recently invested in a number of British companies, including Majestic Wines, Vagabond and Punch Pubs & Co, adding that this deal "further strengthens" its commitment to the UK market.

In a statement, chairman at Loungers, Alex Reilley, said that the firm "remains confident about Loungers’ future prospects", after it announced that its revenue and profit before tax had increased by 19.2% and 51.3% respectively year-on-year in the 24 weeks to 6 October.

Managing director at Fortress, Domnall Tait, stated: "Fortress is pleased to present this offer for Loungers, a company we believe holds a strong and differentiated position in its industry. Loungers' directors have delivered impressive increases in the number of locations, same-store sales and revenues over the past several years - in spite of the recent challenges faced by the wider hospitality sector. This growth, and management's continued commitment to the business, give us confidence in the company's growth potential and in the opportunity to increase value."

Despite the offer being accepted by the firm, shareholders at Loungers will still vote to decide whether the deal will go ahead.

Investment director at AJ Bell, Russ Mould, concluded: "Takeover activity was red hot on the UK market, with action being recorded at the middle and lower ends of the market cap spectrum.

"Among small caps, hospitality group Loungers is being gobbled up. It was only a matter of time before Loungers was taken over as it never seemed to click with the market despite showing considerable progress since floating in 2019.

"So many UK-listed companies are being taken over because the market didn’t spot the value on offer. Interestingly, it turns out that Loungers put itself up for sale earlier this year because it acknowledged the market wasn’t attributing fair value, so selling to a third party was an alternative way of generating an uplift for shareholders."

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