Hostmore's Plunge: TGI Fridays Deal Falls Through, Shares Nosedive 90%

Shares of Hostmore fell dramatically by over 90% due to the termination of its acquisition plan for TGI Fridays. The restaurant chain's financial instability and mismanagement of key asset-backed securities led to severe operational challenges, a strategic review, and potential de-listing from the London Stock Exchange.

Shares of British restaurant operator Hostmore plummeted more than 90% on Monday after halting plans to acquire TGI Fridays. The significant drop came after TGI Fridays was removed as the manager of TGIF Funding, holder of rights to collect royalties from the franchise.

Hostmore, which manages TGI Fridays in the UK via its unit Thursdays (UK), announced that the sale of Hostmore retail outlets is forecasted to complete by September albeit at a reduced value. "The predictable and highly cash-generative royalty stream of TGI Fridays was the primary attractive feature for the Group in pursuing the acquisition," Hostmore stated, while declining to specify why TGI Fridays lost the management role.

Since its record high in November 2021, Hostmore's shares have fallen more than 99%. The hospitality company, which debuted on the London bourse in 2021, is grappling with mounting debts and loss-making outlets, causing managerial changes and operational cutbacks. With net debt at £29.7 million against a market value of £1.3 million, Hostmore indicated its potential de-listing post the retail sale. TGI Fridays will proceed with UK operations under new ownership.