A hedge fund has built up a 19.46% stake in Italian restaurant group Gondola, which is currently the subject of a £560m (US$1bn) bid from private equity group Cinven.
Boussard & Gavaudan has managed to accumulate its stake through contracts for difference at prices between 400p and 410p a share. The offer price is 415p a share, indicating that it will make a profit of at least £1.3m through this arbitrage.
Gondola’s previous private equity backers TDR Capital and Capricorn, who floated the company on the stock market at 320p last year, have already agreed to accept the offer. They own 48% of the group. With the directors, Cinven has secured 50.7% approval.
TDR and Capricorn constructed the group through the purchase of Pizza Express and ASK Central, both of which were listed companies.
A rival private equity investor with interests in the sector doubted whether Boussard & Gavaudan’s move would herald a rival bid at a higher price. “It seems to be that with TDR and Capricorn accepting the current offer, it is already a done deal.”
The source added that the hedge fund would be unlikely to retain its holding as a minority shareholder if Gondola’s shares were delisted.
Boussard & Gavaudan is in the process of raising €500m for its Sark fund ahead of a listing on Euronext. The fund, which regularly takes stakes in active bid targets, already has €1bn in assets.