Buyout on menu at Chez Gerard

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The Independent Online

The management of Paramount Group, the restaurant company that owns the Chez Gérard, Livebait and Bertorelli's chains, yesterday revealed it was in talks with the board over a £28m buyout of the company.

The management of Paramount Group, the restaurant company that owns the Chez Gérard, Livebait and Bertorelli's chains, yesterday revealed it was in talks with the board over a £28m buyout of the company.

The potential buyout, thought to be led by the chairman Guy Naggar and chief executive Nick Basing, is at present priced at up to 35p a share. The company had seen its shares rise 13 per cent in the past week to 35p, forcing it to make an announcement admitting to the talks. Shares yesterday closed at 34p.

Paramount, which was a cash shell, bought the ailing Chez Gérard group in April 2003. Its restaurants are predominately in the London area and it has suffered amid a downturn in the City and a fall-off in tourism.

Mr Naggar, a veteran City banker who recently upped his holding in the company to 12 per cent, brought in Mr Basing from Unilever to run the group after the takeover. Mr Naggar also runs Dawnay Day & Co, the private equity house, but it was not clear yesterday whether it is providing any financial backing to the management. Any bid would have to get support from JO Hambro Capital, which is the majority-owner of the business with a 66 per cent stake. Mr Basing and Ralph Elman, the finance director, also have small stakes in the group.

Since the Chez Gérard acquisition, the management have embarked on a turnaround programme at the group's outlets, and the shares have recovered steadily from a five-year low of 13.75p, hit in September. A number of restaurants have been refurbished and poorly performing sites in Manchester, Oxford and London were sold off. Results have improved and in March it revealed profits for the half-year had almost doubled to £900,000.

A spokeswoman for the company said discussions with the management were at a "very preliminary stage".

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