The UK operator of TGI Fridays has gone into administration, putting 4,500 jobs at risk.
Hostmore has appointed administrators and delisted its ordinary shares after being unable to find a “lasting solution” to save the business.
It comes after the group, which runs the UK franchise for TGI Fridays, saw plans to buy its US parent company fall through earlier this month.
In April, Hostmore had agreed to buy the TGI Fridays casual dining brand for £177 million. However, the deal collapsed after the American company lost control of TGIF Funding, which controls the royalties from its lucrative franchise agreements and intellectual property.
The surprise announcement saw Hostmore’s share price plunge more than 90% from the start of the month to open at 0.2 pence.
Hostmore's collapse represents a dramatic fall from when it first traded at 147 pence per share after being spun out of Electra Private Equity in November 2021.
A London Stock Exchange update from 18th September confirmed that Hostmore's ordinary shares had been suspended from the Financial Conduct Authority’s Official List 'at the request of the company.'
Shortly after the suspension of its shares, Hostmore shared a general business update revealing that 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 ordinary shares are expected to be cancelled and the company wound up 'in due course' as part of the administration process following its financial troubles.
A statement issued on behalf of Matthew Bibby, chief financial officer of Hostmore, said: “Unfortunately, all of the Board’s efforts to implement a lasting solution to support the long-term financial future of the business came against a highly challenging trading and macroeconomic backdrop, and efforts to create value for shareholders through the proposed acquisition of TGI Fridays, while well-advanced, encountered adverse events outside of the Board’s control.”
Hostmore confirmed that the sale process for its portfolio of 87 restaurants is still ongoing.
Its trading subsidiary, Thursdays (UK) Limited, continues to operate as normal, and all existing stores remain open despite the company's recent challenges.
