Listed pub and restaurant owner Good Spirits Hospitality has pulled out of a deal to buy The Nourish Group, blaming Covid related restrictions.
Photo: © Mint Images
A provisional deal was done last November for Good Spirits to buy 10 bars and restaurants from Nourish for $21.4 million, with an additional payment of $5.9m depending on performance.
Good Spirits chair Duncan McKeig said its major shareholder backed the deal and was prepared to invest, but potential new investors were put off by obstacles getting into New Zealand and uncertainty about future restrictions on the sector.
"We were at an advanced stage with an investor who could see the strength in our growth strategy and approach. However, the possibility of future Covid restrictions in the New Zealand hospitality sector proved too great a barrier for final agreement of terms being reached with the investors."
He said the deal, which would have doubled the size of Good Spirits and added venues in Auckland, Wellington and Queenstown, had been hatched when it was thought the sector was through the worst of Covid restrictions.
McKeig said the company would now look to rebuild revenue and profits after two years of Covid restrictions, as well pursue chances to expand and cut debts.
Last year, Good Spirits pulled out of a deal to buy three central city bars in Wellington, because the acquisition did not stack up financially.