Thank Goodness It’s… Administration?

Administrators at Teneo are on standby at the UK arm of TGI Fridays, as the American themed restaurant chain reels from the collapse of its attempts to purchase its American arm.

The company that owns the UK franchise, Hostmore plc, is scrambling to sell its 87 restaurants, in an attempt to save thousands of jobs (3,500 to be precise) and to prevent the TGI brand from vanishing from the British high street.

This comes as merger talks with TGI Fridays in the US failed last week. A shock announcement that talks had ended wiped almost 90% off Hostmore’s share price, leaving it with a stock market value below £1m. A £180m reverse takeover bid for its larger US counterpart was seen as the last throw of the dice, but the plan was brought to an abrupt end after the American franchise owner that Hostmore planned to buy lost the rights to the royalty payments generated by the TGI Fridays name. The first TGI Fridays apparently opened in 1965 in New York, "with the timeless promise ‘In here, it’s always Friday’."

Teneo have been tasked with finding potential buyers as creditors attempt to recoup monies lent to the company. Hostmore reportedly had outstanding borrowings of £35m at the end of last year. A deadline of the end of September has been set for any asset sales that will help repay NatWest and HSBC, the company’s main lenders.

Even if all of the 87 sites are sold, the company has said that this is unlikely to result in their debts being paid in full, meaning it would be delisted and wound up less than three years from floating on the stock market.

Rival chains may be tempted to cherry pick stores in the most attractive locations. Industry sources reportedly doubt that a single buyer would be found for the whole estate.