London Cocktail Club owner Nightcap has proposed to cease trading on AIM and re-register as a private company.
The late-night bar chain operator said it would take this action as its valuation “does not reflect” its potential.
In an update published today, Nightcap chair Gareth Edwards said the board “unanimously” concluded that the decision to re-register as a private company is the “most effective way” to reach its long-term potential.
It comes ahead of its Annual General Meeting on 17 July, where shareholders must approve the proposal. If approved, it would take effect at 7 am on 29 July.
“We have not taken this decision lightly; however, following an extensive review and deliberation, we have determined the most effective way to maximise shareholder value in the long term and increase the potential for the long-term success of the company,” Edwards said.
Edwards said the board is convinced Nightcap’s current valuation “does not reflect” its potential or achievements so far, which “is unlikely to change in the short-to-medium term.”
“We believe that we will be able to continue to execute on our strategy as a private company and therefore we believe that a cancellation of the Company’s admission on AIM is in the best interests for Shareholders and for the future of our business as a whole.”
The hospitality sector has been hit hard over the past few years as it continues to battle the lingering effects of the cost-of-living crisis, inflation and wages.
However, the late-night bar chain said revenues are “in line” with market expectations despite a challenging trading year.