Shares of Hotsmore, the operator of TGI Fridays in the UK, dropped more than 90% on Monday after it scrapped its plans to purchase the US-themed restaurant chain, after TGI Fridays lost control of key assets.
Hotsmore, which runs 87 TGI Fridays restaurants in the UK, was set to buy the chain for £177m.
But the company said the acquisition was "no longer being actively pursued" after TGI Fridays was removed as the manager of the vehicle that holds the right to collect royalties from the chain.
“The predictable and highly cash generative royalty stream of TGI Fridays was the primary attractive feature for the Group in pursuing the Acquisition," Hotsmore said, before shares fell as much as 93% on Monday morning.
The company was first floated on the London Stock Exchange in 2021, but now expects to be "wound up" and de-listed.
Hotsmore revealed UK sales have fallen by more than 10% this year, while they dropped by nearly a quarter over the first three weeks in July, compared with the same period the year prior.
The firm said TGI Fridays will continue its UK operations under a new ownership.
FTSE 100
The UK's flagship share index, the FTSE 100, was up 20-points at 8,247 shortly after opening this morning.
Brent crude oil futures were down 0.17%, trading at $71.72 a barrel.