Two of the biggest shareholders in Bristol-based café/bar chain Loungers have said they will vote against the £338m bid for the group announced this week by a US private equity company.
Fortress Investment Group’s all-cash offer has been accepted by Loungers’ board and a number of major investors in the business, which launched with a single café on North Street, Bedminster, 22 years ago, have also backed it. 
But at least two are opposed to the 310p-a-share bid – a 30.3% premium on the previous day’s closing price and which needs shareholder approval to proceed.
Slater Investments, which owns 10.4% of Loungers, told The Times it was against the offer, with co-founder Mark Slater saying: “It’s the wrong time to be trying to sell a very good business of this kind.”
The bid from Fortress, which owns Majestic Wines and Poundstretcher and earlier this month acquired the Curzon cinema chain, is also opposed by Dan Harlow, head of UK equity at AXA Investment Managers.
Describing it as appearing to be “another opportunistically priced bid”, he said Loungers’ management’s frustration with the group’s recent share price was “no excuse to thrown the towel in at what we consider could be the darkest hour”. 
Fortress’s approach was made public around the same time as Loungers posted its latest interim results, which showed its strong financial growth of recent years continuing – and no let-up in the expansion of its three brands, Lounges, Cosy Club and Brightside.
Loungers chair Alex Reiley, pictured, said: “We remain very confident about Loungers’ future prospects and the half-year results that we announced separately clearly demonstrate the strong momentum that we have in the business.
“We are more ambitious than ever and we see Fortress as being an ideal partner to help us take Loungers into the next phase of its growth journey.
“We believe that the acquisition represents a compelling proposition for all of our stakeholders and will allow us to execute our ambitious growth plans even more decisively and effectively.”
Having built a chain of 230 Lounges – all more or less based on its first one in Bristol – as well as 35 Cosy Clubs, which tend to be based in larger, city and town-centre buildings, and four Brightside roadside restaurants, Loungers has a long-term plan to have a total of 600-plus outlets.
Fortress said it was “supportive of Loungers’ existing strategy” and held the management team in “high regard”.
Fortress managing director Domnall Tait said the group brought to the table a successful track record of investing in consumer-focused businesses across the globe, particularly in the UK.
“Today’s announcement further strengthens Fortress’ commitment to the UK market, and to being a responsible steward of and investor in UK businesses,” he added.
