D&D London owners are currently in discussions to purchase the UK operations of TGI Fridays, following the collapse of its parent company, Hostmore, into administration last week.
Breal Capital and Calveton, the investment firms that acquired D&D London last year, are in advanced negotiations to take over the UK franchise of TGI Fridays.
Industry sources indicated that the potential acquisition of TGI Fridays' UK operations by Breal Capital and Calveton could result in the new owners taking over most of the 89 sites.
However, despite this, a significant number of job losses are anticipated.
One analyst estimated that only 50 to 60 of the TGI Fridays locations are commercially viable, suggesting that roughly three-quarters of the current UK workforce, around 2,400 of the 3,200 employees, could be retained under the new ownership.
It appears that a new company, Calverton Texas Ltd, was established on Monday, 23 September.
Hostmore, the parent company of TGI Fridays in the UK, announced last week that it was filing for administration, but the company clarified that this would not affect Thursdays (UK) Limited, its trading subsidiary. However, Hostmore itself understood to have filed a notice of intention to appoint administrators yesterday.
Hostmore said in a statement to the London Stock Exchange last week: “The board inherited a very challenging set of circumstances, but a focus on reducing costs, revising the Group's capital allocation policy and implementing both board and senior management changes, meant that the group was able to reduce annualised expenditures by £12m, significantly reduce losses from unprofitable stores, and operate the group's stores at a best in class efficiency level for the sector, all while improving guest scores to our highest levels on record.
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.”
While the exact amount that Breal Capital and Calveton are likely to pay for TGI Fridays UK remains uncertain, industry insiders seem optimistic about their capacity to effectively manage a streamlined version of the business.
The deal is expected to include TGI Fridays UK's existing leases and the rights to use the TGI Fridays brand within the UK.
The collapse of TGI Fridays' UK parent, Hostmore, comes less than six months after it agreed to a £177m deal to merge the US TGI Fridays restaurant business into the London-listed Hostmore.
