PizzaExpress investors demand chairman's head for backing offer

Shareholders in PizzaExpress moved to mount a revolt yesterday over a recommended £263m offer for the company, calling for the group's chairman, Nigel Colne, to stand down and for the board to requisition an extraordinary meeting.

In a letter to the board's chief executive, David Page, Jeremy Utton from Analyst Investment Management, which has a stake of nearly 3 per cent, called for "urgent action", including the appointment of a new "heavyweight chairman".

Mr Utton, along with other shareholders such as Fidelity, which has a stake of more than 9 per cent, is upset at the decision by the independent directors, headed by Mr Colne, to back a 367p-per-share offer for the beleaguered company from Luke Johnson, the group's former chairman. Institutional investors representing more than 20 per cent of the stock are understood to have put pressure on the board to withdraw its recommendation and consider alternative proposals.

Mr Utton called for Mr Page to requisition an EGM to let him present his proposals. Sources close to the group said it was unclear whether Mr Page had that authority.

Mr Utton's proposals centre on a share buyback programme; however, under takeover rules, a company in an offer period cannot repurchase its stock in the market. Mr Page, whose own mooted management buyout failed to materialise, declined to comment.

The renewed unrest came as reports suggested a rival bidding consortium was close to tabling an offer for PizzaExpress of up to 387p a share. TDR Capital and Capricorn Ventures International, the main investor in the Nando's chicken chain, are keen to trump Mr Johnson, although the talks are thought to have faltered over the issue of a break fee.

Meanwhile, Ask Central, PizzaExpress' archrival, yesterday highlighted the extent to which PizzaExpress' management had taken their eye off the ball by reporting a strong increase in profits and sales. Pre-tax profits at the group, which owns the Ask and Zizzi pizza chains, in the year to 29 December rose 23 per cent to £16.7m, while sales climbed21 per cent to £95.8m.