The private equity owners of PizzaExpress made a £213m offer for ASK Central, the pizza and pasta chain, yesterday in a move that sees off the rival bidder The Restaurant Group and ends their battle for the business.
TDR Capital and Capricorn Ventures International are offering 220p in cash for each ASK share - trumping an offer from The Restaurant Group which was worth about 185p a share.
The Restaurant Group, which owns the Garfunkel's and Est Est Est chains and which was previously known as City Centre Restaurants, said yesterday it was walking away from the contest and would not be revising or extending its offer.
Its rival's 220p a share offer, it said, valued each ASK restaurant at about £1.3m, which was "in excess" of the price it would consider paying. Alan Jackson, the chairman, said: "Our offer for ASK Central had both commercial and financial logic, at what we considered to be a fair price. However, we were not prepared to overpay or dilute the returns available to our shareholders."
The move on ASK Central by TDR comes less than a year after it bought PizzaExpress - which has about 305 restaurants - for £278m. Buying ASK Central as well will give it another 111 ASK restaurants, 58 Zizzi outlets and a handful of Jo Shmo's diners.
While the private equity firm has trimmed the number of PizzaExpress outlets since it bought the chain, it is not expected to do anything radical with the ASK operation.
Adam Kaye, the chief executive of ASK - which was founded by the Kaye family - said he expected life at the chain to carry on as normal under its new private equity owners. "I think their [TDR's] intention is to run it exactly how it is. We opened 30 restaurants last year and we think we've got huge growth in the future and I think they intend to leave things exactly how they are. It's working - they'd be mad to play with it."
He said the certainty of cash in this latest offer, along with the premium on the table, combined to make it "very attractive" for shareholders. Consequently, the directors withdrew their support for The Restaurant Group's proposal and urged shareholders to accept the new deal.
Mr Kaye said that TDR would run the ASK and PizzaExpress operations entirely separately although he conceded there would be some crossover in purchasing and distribution. He and his brother Samuel have agreed to stay on at the company on contracts with 12 months' notice. "The team have given a commitment that we'll stay with the business. It's our baby and we're still emotionally attached to it and we're sticking with it," he said.Reuse content