Business Update

Hostmore PLC

09 September 2024

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH 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: [phone]

Email: [e-mail]

DGA Group

Jonathon Brill, James Styles

Tel: [phone]

Email: [e-mail]

 

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