Nightclub operator Deltic, which owns approximately 57 clubs and bars under the PRYZM and Fiction brands, has outlined its plans to merge with Revolution Bars.
Revolution has previously rejected the offer to combine its business with the rival nightclub operator.
Under the terms of its new proposal, existing Revolution shareholders would own 65 per cent of the new company, while Deltic would own the remaining 35 per cent.
Deltic said the two firms could come together to form a powerhouse group.
But Revolution, which is currently undergoing takeover talks with Slug and Lettuce owner Stonegate, said the offer was “not in the best interests of shareholders at this time”.
The rejection leaves Stonegate’s 203p per share offer still very much on the table.
A spokesperson from Revolution said it had met with Deltic but had “concerns” about the benefits of its offer and “did not see any merit in progressing with their proposal”.
Deltic boss Peter Marks said Revolution was “denying its own shareholders the opportunity to consider a choice” between its bid and the existing one from Stonegate.
He said an enlarged listed entity would produce better returns for investors.
“We are disappointed by this outcome and believe Revolution shareholders should be aware of alternatives to the possible Stonegate offer,” Mr Marks said.
Shares in revolution recently halved, from 212p in May to 106p in July, after revealing that costs were rising faster than anticipated. It said its pre-tax profits, which fell 29 per cent in the 12 months to 1 July, had been hit by the National Living Wage, the new apprenticeship levy, and above-inflation increases in business rates.
Under City takeover rules, Deltic must declare its intentions by 17:00 on 10 October.
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