Ten Entertainment shares soared on Wednesday after the UK bowling alley operator agreed to a £287million takeover by US private equity firm Trive Capital Partners.
The bowling group, which runs 52 sites across Britain, told investors they would receive 412.5p per share, a 33 per cent premium to their closing price on Tuesday.
Dallas-based Trive’s takeover vehicle, Neon, already has backing from major shareholders representing 39.5 per cent of the shares, Ten said.
Ten Entertainment skyrocketed 31.61 per cent to 408p on Wednesday morning, taking year-to-date gains to 64.3 per cent.
The bowling group, which runs 52 sites across Britain, said that the deal will be worth around £287million.
Ten Entertainment’s board is urging remaining shareholders to back the deal, which is expected to be completed by the first quarter of 2024.
They told investors that while they ‘remain confident’ in the group’s ‘ability to succeed as an independent business’, Ten ‘is not immune to the highly unstable national and international political outlook together with a volatile economic backdrop’.
Directors seem to basically be saying that it’s an uncertain world and guess what, money talks
The board added: ‘Directors also believe that, in light of the opportunities, risks and historical trading of the TEG share price, the offer… presents an opportunity for TEG shareholders to accelerate the crystallisation of a certain value from their investment at an attractive premium.
‘The acquisition provides an opportunity for TEG Shareholders to achieve an attractive premium to the current share price, which has performed strongly, trading near its 52-week high levels.’
Adam Bellamy, chair of TEG, said: ‘I am confident that the growth strategy we have in place for the business will continue to deliver for all our stakeholders.
‘However, whilst TEG has performed well in the public markets in comparison with its peers, the acquisition provides all TEG Shareholders with the opportunity and certainty of an exit which I believe recognises the underlying value in our business.’
Commenting on the deal, head of equity funds at Hargreaves Lansdown Steve Clayton said the group’s directors ‘seem to basically be saying that it’s an uncertain world and guess what, money talks’.
‘The price that Trive are offering is a hefty premium to TEG’s previous record high, reached before the pandemic.’
As well as more than 1,000 bowling lanes across dozens of sites, the Bedford-based company’s facilities include Houdini Escape Rooms, American pool tables and laser arenas.
It saw revenues soar to record levels in the wake of pandemic restrictions being lifted.
Ten Entertainment board bowled over by bumper offer
For its part, Trive backs TEG’s market position and its management team, which has a ‘clear vision and growth strategy for the future direction’ of the company.
It said: ‘[Trive] believes that it can support TEG’s strong management team in accelerating its long-term growth potential, and that it can provide, where needed, access to additional capital, expertise and resource needed to fulfil TEG’s strategic objective to accelerate the longer-term potential of the business.
‘This will enable the further investment needed in order to realise TEG’s strategic growth agenda of expanding its footprint of sites and improving the quality and breadth of services TEG provides its customers.’
Trive partner Shravan Thadani added: ‘Trive believes that private ownership will enable TEG to achieve its long-term growth potential through continued investment in organic initiatives and strategic acquisitions.
‘To that end, and given our experience in the consumer and multi-unit retail sectors, we are excited to provide the operational resources, strategic support and capital required to enhance TEG’s next phase of growth.”
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