Nightcap has walked away from a takeover of Revolution Bars, after the bar operator rejected a proposal earlier this week.

Revolution Bars, which owns brands including Revolution, Revolucion de Cuba and Peach Pubs, has been struggling financially in recent years, and saw its shares suspended earlier this year after it failed to submit its results for the second half of the financial year.

Nightcap, which operates 46 venues across the UK across 11 brands such as Dirty Martini, Tonight Josephine and The Cocktail Club, had approached Revolution Group earlier this month in an "exploratory meeting".

Revolution Group said the firms were exploring a "range of possible transactions", which included an acquisition deal by Nightcap.

The struggling hospitality firm has announced in recent months that it was undertaking a restructuring programme, which included the closure of eight sites across the UK, with Sky News reporting that this figure could rise to as high as 20 sites.

Under the offer, Nightcap would have placed Revolution’s £12.5m fundraising with a merger of the two businesses, allowing for shareholders to "suffer less dilution and achieve more for their investment".

Under takeover rules, Nightcap have until 5pm today to announce a formal intention to make an offer for the firm or walk away from the deal. However, Nightcap said that a number of stakeholders and advisers at Revolution Bars had rejected the proposal.

Investment analyst at AJ Bell, Dan Coatsworth, said: "Putting two weak things together doesn’t make a strong entity – it merely doubles the problem. That was the situation when Nightcap tried to buy Revolution Bars, a deal which has now collapsed after pushback from the latter.

"Both companies are experiencing difficult trading caused by a mixture of consumers struggling in a higher interest rate environment and younger people frequenting late-night bars less often because many aren’t interested in guzzling endless pints of beer or loading up on cocktails.

"The deal looked doomed from the start because Revolution Bars was already sorting out emergency fundraising to keep the lights on and the Nightcap offer would have scuppered that lifeline."

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