Ten Entertainment to be bought by US PE firm Trive Capital for £287m

Bowling operator Ten Entertainment said on Wednesday that it has agreed to be bought by US private equity firm Trive Capital Partners for £287m.

Under the terms of the deal, Ten Entertainment shareholders will receive 412.5p per share in cash. This is a 33% premium to the closing share price on Tuesday.

Ten Entertainment chair Adam Bellamy said: "TEG is one of the UK's largest listed leisure businesses, with a highly capable management team and a strong track record of growing sales and profit. In particular, since reopening after the Covid pandemic, TEG has achieved record results with group adjusted profit before tax of £26.1m delivered in FY22.

"I am confident that the growth strategy we have in place for the business will continue to deliver for all our stakeholders. However, whilst TEG has performed well in the public markets in comparison with its peers, the acquisition provides all TEG shareholders with the opportunity and certainty of an exit which I believe recognises the underlying value in our business."

He said the price offered by Trive represents an attractive premium and that TEG’s directors "have no hesitation" in recommending the offer.

At 0900 GMT, the shares were up 31% at 407.36p.

Victoria Scholar, head of investment at Interactive Investor, said: "After Mars’ takeover of Hotel Chocolat and now Trive’s acquisition of TEG, there could be more international buyers set to swoop on London-listed stocks languishing at depressed valuations in the months ahead.

"With UK stocks underperforming the US and Europe, London hosts several possible takeover targets for deep pocketed international PE firms or rivals looking to expand in the UK via M&A. Small-to-mid sized UK companies rather than FTSE 100 heavyweights are more likely to be realistic takeover targets."

Russ Mould, investment director at AJ Bell, said: "Ten Entertainment is a classic example of stock that has traded on a cheap valuation and delivered decent results, yet has remained under the radar of many investors.

"Given the market hasn’t recognised its true value, it’s no surprise that a private equity-backed vehicle has come along and tabled an offer which looks too good to refuse, hence why the board has recommended it.

"Ten Entertainment is the perfect example of why some investors like to fish for opportunities in the small cap space. The business has been ticking a lot of the right boxes for years, albeit disrupted by the pandemic. There were plenty of signs it was a well-run business and its decision to offer bowling at affordable prices during the cost-of-living crisis has proved wise.

"Assuming the takeover completes, it will be yet another loss to the UK stock market which still isn’t replenishing the pot with new IPOs."