Revised Merger Proposal




                                                                                                                                    9 October 2017

Revised merger proposal

The Deltic Group Limited and its holding company Ranimul 1 Limited (“Ranimul” and, together with Deltic Group Limited, “Deltic”) note the announcement by Stonegate Pub Company Limited (“Stonegate”) dated 6 October 2017 in which Stonegate disclosed that Artemis Investment Management LLP’s had withdrawn its non-binding letter of intent to vote in favour of the offer by Stonegate. Deltic refers to its announcement, dated 5 October 2017, regarding its proposed terms for a merger between Deltic and Revolution. Terms defined in that announcement have the same meaning in this announcement.

The Merger Proposal remains Deltic’s preferred structure through which to combine the businesses of Deltic and Revolution. Following positive feedback from a significant number of Revolution shareholders with whom Deltic has met in respect of the Merger Proposal, Deltic herein sets out an alternative merger proposal (the “Revised Merger Proposal”) as follows:


a) The Revised Merger Proposal continues to be based on the proposal announced on 5 October 2017 under which existing Revolution shareholders would own 65% and Ranimul shareholders 35% of the Enlarged Group (subject to paragraphs (b) and (c) and the reservations set out below).

b) The Ranimul Loan (£22.3 million as at 24 February 2017) will still be, as set out in the Merger Proposal, refinanced alongside other facilities with third party debt to reflect a level of gearing which Deltic believes prudent and desirable.

c) However, as the purpose of refinancing the Ranimul Loan was to replace high coupon debt with third party debt at commercial rates and not to extract cash, the Ranimul Loan holders would, as an alternative to the original Merger Proposal, be prepared to convert all or part of the value of the Ranimul Loan into additional shares in Revolution at a conversion price of not less than 203 pence per share subject to a special dividend or equivalent mechanism for a return of capital of not less than 20 pence per share being paid to all shareholders in the Enlarged Group on the merger becoming effective.

d) This demonstrates: Deltic’s confidence in 203 pence as a minimum per share valuation for the Enlarged Group; its commitment to be treated equally with Revolution shareholders; and its belief in the value creation opportunity of the Enlarged Group.

It is not possible to implement the Revised Merger Proposal without the full engagement and agreement of the directors of Revolution.

As at the date of this announcement, this has regretfully still not been forthcoming. Furthermore, in the announcement by Revolution dated 9 October 2017 (the “Revolution Response Announcement”), Revolution continues to reject any merger proposal by Deltic.

Based on the fact that Revolution has since 6 October raised negligible enquiries on the due diligence information provided to it, Deltic can only assume that Revolution has conducted highly limited analysis on Deltic and, by its comments in the Revolution Response Announcement, has demonstrated that it has not sought to gain any genuine understanding of Deltic or its business model.

Furthermore, Revolution has not conducted any meetings with Deltic’s wider management team. Rather, Deltic believes the Revolution board has sought to apply its pre-conceptions and prejudices in re-confirming the position it has held since Deltic made its first approach.

To put this in context, Revolution’s Chief Executive has not had a single conversation, meeting or any other form of communication with either Deltic or its advisors in respect of the merger proposals.

Against such a backdrop of hostility, negativity and ill-informed commentary, Deltic does not intend to comment individually on each of the points made by Revolution in the Revolution Response Announcement. Instead, given its very clear value proposition, it would instead invite Revolution shareholders to question why Revolution’s Board has failed to engage meaningfully in any alternative to Stonegate’s offer of 203 pence per share.

Deltic also notes the announcement by Stonegate dated 6 October, 2017, in which Stonegate commented on the certainty of Stonegate’s offer as compared to the Merger Proposal. The Revised Merger Proposal is not a high risk proposition (the Ranimul Profit Forecast, the Ranimul Long Term Forecasts and the Quantifiable Financial Benefits Statement have been made with due care and attention and Deltic’s projected post-merger gearing is highly conservative and contrasts significantly with Stonegate’s wholly debt funded offer) and is straightforward to execute if Revolution is prepared to engage. Deltic believes Revolution shareholders are perfectly capable of reaching their own determination as to where value lies.

Commenting on the Revolution Response Announcement, Bob Brannan, Deltic’s Chairman, said:

Deltic is incredulous that Keith Edelman, the only Board member of Revolution who has had any contact with Deltic in respect of the merger proposals, and its advisers can, given feedback from Revolution’s shareholders, continue to recommend Stonegate’s offer at a price below both the current Revolution share price and all broker estimates whilst refusing to have any meaningful engagement with Deltic and demonstrating a limited understanding of the nightclub market. If Deltic succeeds in implementing its Revised Merger Proposal, it will adopt a very different approach to the stewardship of shareholders’ capital.”


Nothing in this announcement should be taken as an indication of the price at which any cash offer would be made, if one were to be made.

On the basis that there has not been any substantive engagement by the Revolution board with Deltic on its Revised Merger Proposal to date, and consequently no agreement has been reached on the terms of the Revised Merger Proposal at the time of this announcement, the number of Revolution shares to be issued as consideration under the Revised Merger Proposal, and the value of the Revised Merger Proposal as implied by the merger ratio above, may be subject to change.

Pursuant to Rule 2.5 of the Code, Deltic reserves the right to set aside the financial terms referred to in this announcement and/or to vary the form and/or mix of the consideration referred to in this announcement, and/or at any time to make an offer or a merger proposal on less favourable terms, including in the following circumstances:

  • with the recommendation or consent of the board of Revolution;
  • if Revolution announces, declares or pays any dividend or any other distribution to shareholders;
  • if a third party (other than Stonegate) announces a firm intention to make an offer for Revolution; or
  • if Revolution announces a whitewash proposal (for the purposes of Note 1 of the Notes on Dispensations from Rule 9 of the Code) or a reverse takeover.

Deltic strongly urges Revolution shareholders to vote against the Stonegate offer and to encourage Revolution’s Board to progress Ranimul’s Revised Merger Proposal to allow it to be formally presented to, and voted on, by Revolution shareholders.

Deltic confirms that it has until 5.00 p.m. on 10 October 2017 either to announce a firm intention to make an offer for Revolution under Rule 2.7 of the Code or announce that it does not intend to make an offer for Revolution.



The Deltic Group Limited                                                                    01908 544100

Peter Marks, Chief Executive

Bob Brannan, Chairman

Ranimul 1 Limited                                                                               01908 544100

Lawrence McGreal

Stifel Nicolaus Europe Ltd (Financial Advisor to Deltic)     020 7710 7600

Tim Medak

Robin Mann

Peter Lees

Anthony Ledeboer

Hudson Sandler (Public Relations Advisor to Deltic)                020 7796 4133

Nick Lyon

Lucy Wollam




This announcement is not intended to, and does not, constitute, represent or form part of any offer, invitation or solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.


The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law or regulation and therefore any person who comes into possession of this announcement should inform themselves about, and comply with, such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws or regulations of any such relevant jurisdiction.


Stifel, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser and broker exclusively for Ranimul and Deltic and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Deltic for providing the protections afforded to clients of Stifel, nor for providing advice in relation to any matter referred to herein.


No profit forecasts or estimates


Other than the Ranimul Profit Forecast and the Ranimul Long Term Profit Forecast, no statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per ordinary share, for Ranimul, Deltic or Revolution, respectively for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per ordinary share for Ranimul, Deltic or Revolution, respectively.


Quantified Financial Benefits Statement


Statements of estimated cost savings and synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to in the Quantified Financial Benefits Statement may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. No statement in the Quantified Financial Benefits Statement, or this announcement generally (other than the Ranimul Profit Forecast and the Ranimul Long Term Profit Forecast), should be construed as a profit forecast or interpreted to mean that the Enlarged Group’s earnings in the first full year following the merger, or in any subsequent period, would necessarily match or be greater than or be less than those of Revolution and/or Ranimul and/or Deltic for the relevant preceding financial period or any other period.




Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.


Publication on website


In accordance with Rule 26.1 of the Code, a copy of this announcement will be available at by no later than 12 noon (London time) on 10 October 2017. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.


Forward looking statements


This announcement, including information included or incorporated by reference in this announcement, may contain certain “forward looking statements” regarding the financial position, business strategy or plans for future operations of Ranimul, Deltic and/or Revolution. All statements other than statements of historical fact included in any document may be forward looking statements. Forward looking statements also often use words such as “believe”, “expect”, “estimate”, “hope”, “will”, “may”, “should”, “would”, “could”, “intend”, “anticipate” and words of a similar meaning. Statements relating to reserves are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Ranimul, Deltic and/or Revolution’s businesses and potential synergies resulting from the transaction; and (iii) the effects of government regulation on Ranimul, Deltic and/or Revolution’s business. By their nature, forward looking statements involve risk and uncertainty that could cause actual results to differ materially from those suggested by them. They are also based upon assumptions. Much of the risk and uncertainty relates to factors that are beyond Ranimul, Deltic and/or Revolution’s ability to control or estimate precisely, such as future market conditions and the behaviours of other market participants, and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. Neither the Deltic group nor any of their respective associates or directors, officers, employees, managers, agents, representatives, partners, members, consultants or advisers: (i) provide any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements will actually occur; nor (ii) assume any obligation to, nor intend to, revise or update these forward looking statements, except as required pursuant to applicable law.