The UK operator of TGI Fridays has gone into administration, putting 4,500 jobs at risk.
Hostmore has appointed administrators and canceled its ordinary shares after failing to find a “sustainable solution” to save the company.
It comes after the group which runs the UK franchise of TGI Fridays saw plans to buy its US parent collapse earlier this month.
In April, Hostmore had agreed to buy the TGI Fridays casual dining brand for £177m. However, the deal collapsed after the American company lost control of TGIF Funding, which controls royalties from lucrative franchises and intellectual property rights.
With the surprise announcement, Hostmore’s share price fell by more than 90% since the beginning of the month and opened at 0.2 pence.
Hostmore’s collapse represents a dramatic drop from when it first traded at 147p a share after it was spun off from Electra Private Equity in November 2021.
An update from the London Stock Exchange on 18 September confirmed that Hostmore ordinary shares had been suspended from the Financial Conduct Authority’s official list “at the company’s request”.
Shortly after suspending its shares, Hostmore shared a general business update which revealed its board had agreed to file for administration. This decision ultimately led to the delisting of its ordinary shares.
Daniel Smith and Julian Heathcote of Teneo Financial Advisory Limited have been appointed as joint administrators of Hostmore.
The company’s common stock is expected to become void and the company will be wound up “in due course” as part of the administration process due to its financial difficulties.
A statement issued on behalf of Hostmore CFO Matthew Bibby said: “Unfortunately, all of the board’s efforts to implement a sustainable solution to support the company’s long-term financial future took place in a very challenging trading and macroeconomic environment, and efforts to create shareholder value through the proposed acquisition of TGI Fridays, while well advanced, met with headwinds events that were beyond the government’s control.”
Hostmore confirmed that the sale process of its 87-restaurant portfolio is still ongoing.
Its trading subsidiary, Thursdays (UK) Limited, continues to operate as normal, with all existing stores open despite the company’s recent challenges.
