Revolution Bars, which operates the Revolution and Revolucion de Cuba brands, has called off talks with the Deltic Group about a possible acquisition.
The company said late on Thursday that following a period of engagement and due diligence, it has concluded that a deal with Deltic would not be in the best interests of its shareholders.
“The company will continue to focus on delivering the positively received strategy outlined in its preliminary results announcement made on 2 October 2018,” it said.
Revolution confirmed in September that it was in “very preliminary” discussions with Deltic about a possible acquisition of the company.
Earlier this month, the group said it swung to a pre-tax loss of £3.6m in the year to 30 June from a profit of £5.2m the year before as it incurred exceptional costs of £11.1m. Revolution said it was hit by extremes of weather and the FIFA World Cup, as its bars have no TVs and no significant outside space.
“These factors together with an unsettled workforce and the widely documented cost pressures faced by the whole sector led to 2017/18 being a disappointing year and one from which we expect to significantly improve upon,” Revolution said in its preliminary results statement.
At 1455 BST, the shares were down 11% to 113.20p.