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Hostmore PLC announced Tuesday it would acquire TGI Fridays in a £177 million deal that combines the British restaurant group with the American-themed casual dining chain. The acquisition, advised by Herbert Smith Freehills LLP for Hostmore and Ropes & Gray LLP for TGI Fridays, unites the two companies in a move that is expected to reshape the dining scene.

Hostmore To Buy TGI Fridays For £177M : A Strategic Merger

The deal sees Hostmore, which already owns the U.K. franchise of TGI Fridays and operates 89 restaurants across the country, take on the larger company through a reverse takeover. The merged entity will be named TGI Fridays PLC and will trade on the London Stock Exchange, allowing Hostmore to enhance its existing strategy and capitalize on its distinctive brand.

A Boost for Hostmore and TGI Fridays

The all-share transaction will result in Hostmore holding 36% of the enlarged company, with TGI Fridays shareholders owning the remaining 64%. This combination is anticipated to provide a robust platform for growth, offering scale and flexibility to accelerate Hostmore's plans and boost its financial prospects.

Hostmore will issue 224 million shares at 18 pence each to TGI Fridays shareholders, as well as take on $171 million of TGI Fridays' debt. The deal, pending shareholder and regulatory approvals, is expected to conclude by September.

Hostmore To Buy TGI Fridays For £177M: Financial Outlook and Challenges

TGI Fridays reported sales of $502 million but a loss of $33 million for the year ended Dec. 31, 2023. Hostmore's financial results for the 2023 fiscal year have yet to be announced. The merger holds the promise of bolstering the merged entity's performance and establishing it as a major player in the global casual dining industry.