US restaurant chain TGI Fridays is set for a stock market float that could value the business at around £275 million, its investment trust owner Electra Private Equity (ELTA) has confirmed.
The £195 million market cap trust is in the final stages of its wind down after selling off its assets following an attack by activist investor Edward Bramson in 2016, and has decided to seek public listings for two of its largest remaining assets, TGI Fridays - 74% of the trust’s net assets - and shoemaker Hotter Shoes.
Fridays will look to be admitted to the main market of the London Stock Exchange in the third quarter of this year.
STRONG LIKE-FOR-LIKE SALES GROWTH
Electra said early indications for the business post reopening are positive with Scottish stores recording sales of 14% like-for-like growth compared to 2019 levels in the three weeks following reopening on 26 April, whilst English stores have shown like-for-like growth of 76%, albeit over only three days.
It added that pro-forma EBITDA is on recovery to 2019 demand and market share levels of £32.7 million. The business has net debt of £62 million.
The move to list the business comes after shell company Allegro failed to complete a $380 million reverse merger deal in April last year to take the firm public, citing ‘extraordinary market conditions’ after the pandemic-induced sell-off that affected global markets.
HOTTER SHOES WORTH £45 MILLION
Meanwhile Hotter Shoes, the only other asset left in the trust, is expected to float on AIM in the fourth quarter of the year and be worth around £45 million, according to analysts.
Hotter has reported UK online like-for-like sales growth of 30% in the seven months to April 2021, with earnings for the seven months to April 2021 8% ahead of earnings for the continuing business in the year to January 2020, which indicated pro-forma full year EBITDA of £5.4 million. The firm’s net debt stands at £12 million.
Electra said it has decided to keep the two companies on the stock market rather than sell them outright because this way shareholders will be able to benefit as the market for restaurants and consumer sales improves now that lockdowns are ending.
