​Calveton and Breal Capital in Advanced Talks to Acquire TGI Fridays UK Franchise

Calveton and Breal Capital, the current owners of D&D London, are reportedly in advanced negotiations to acquire the UK operations of TGI Fridays. This development follows the recent appointment of administrators by Hostmore, TGI Fridays' parent company, which faced ongoing financial difficulties.

Hostmore, which delisted its ordinary shares last week, had been struggling to find a sustainable solution to save its UK business. Despite numerous efforts, it could not weather the challenges posed by a complex trading environment and broader economic pressures.

Industry reports indicate that Calveton and Breal Capital are considering taking over most of TGI Fridays' 89 UK sites. However, despite this potential acquisition, a significant number of jobs are expected to still be lost. Analysts suggest that only 50 to 60 of these outlets are commercially viable, which would likely result in the loss of some positions.

The potential new owners, Calveton and Breal Capital are no strangers to the hospitality industry. Last October, they acquired D&D London for £60 million, adding renowned restaurants such as Bluebird in London, 20 Stories in Manchester, and Orelle in Birmingham to their portfolio. Additionally, Calveton previously purchased the Byron burger chain in 2020, while Breal Capital has acquired several notable establishments this year, including the Vinoteca wine bars, Yorkshire's Black Sheep Brewery, and London's Brick Brewery and Brew By Numbers.

Hostmore's financial challenges were further compounded when its planned acquisition of TGI Fridays' US parent company fell through earlier this month. The deal, set at £177 million, collapsed after the American company lost control of its franchise royalties and intellectual property, critical assets essential to the business's success. Following the deal's breakdown, Hostmore's share price plummeted by over 90%, reflecting the severity of its financial troubles.

The collapse starkly contrasts Hostmore's initial success when it was spun out of Electra Private Equity in November 2021, with shares trading at 147 pence. The sudden drop in value and the wider economic climate left Hostmore unable to find a lasting solution for the business.

Despite the appointment of administrators, TGI Fridays UK continues to operate, with its trading subsidiary, Thursdays (UK) Limited, which maintains regular business operations. However, sources suggest that even the trading subsidiary has filed a notice of intention to appoint administrators, further highlighting the precarious financial state of the organisation.

The UK's first TGI Fridays opened in Birmingham in 1986, and the brand has since become a familiar name in casual dining across the country. However, its future now rests in the hands of Calveton and Breal Capital, who will face the challenge of restructuring the business to ensure its survival in an increasingly difficult market.

Whether or not the new owners can turn around the fortunes of TGI Fridays UK remains to be seen. However, with their experience in hospitality and a track record of acquisitions, industry insiders remain cautiously optimistic about the future.