Private equity company Cinven has agreed to make a £559m (US$1bn) bid for Italian restaurants group Gondola. The owner of the Pizza Express and ASK chains said on September 6 that it had received an approach worth 415p a share. This came just 10 months after the company was floated on the stock market following a fundraising at 320p a share last November.
Original private equity backers TDR Capital and Capricorn Ventures sold some of their stakes at the time of the flotation. That left them with a 48% holding.
TDR and Capricorn have now given irrevocable undertakings to sell 25.1% in total of the shares in Gondola to Paternoster Acquisitions, the bid vehicle set up by Cinven. The duo will receive 400p a share plus any final dividend declared when the company delivers final results on September 21.
The investors have reserved the right to withdraw the undertakings if a competitive offer comes in at or above 456.5p a share, plus the final dividend.
Cinven, which is being advised by Citigroup, said that a formal offer was subject to the completion of due diligence and the finalisation of financing arrangements. The proposed bid will only proceed with the recommendation of the Gondola Board.
When news broke of the proposed deal, former Pizza Express chairman David Page said he believed that Capricorn might be interested in taking the group private.
Veteran restaurant entrepreneur Page, who chaired Pizza Express before it was taken private in July 2003, said: “The minority partner in the business, Capricorn, owns Nandos and would be able to combine both operations together if they were taken off the market.”
He added that he would “not be surprised if the group goes for more than 415p a share. The company makes £90m a year in cash and has only £370m in debt. A buyer who took the company off the market could get rid of that debt in four years.”
Since leaving Pizza Express, Page has formed the Clapham House group. This AIM-listed company has bought several smaller chains, the Real Greek, Bombay Bicycle Club, Tootsies and Gourmet Burger Kitchen.