PizzaExpress set to serve up £223m bid for rival Ask

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The Independent Online

Institutional investors in Ask Central licked their lips yesterday at the prospect of a £223m counter bid for the Italian pizza chain from the private equity group that owns the rival PizzaExpress.

TDR Capital's 220p-per-share cash proposal trumps the existing offer from Restaurant Group - known until last week as City Centre Restaurants - whose cash and shares bid was worth about 180p at its closing price of 73.75p yesterday.

Ask's board said the offer was "extremely attractive". But with no firm bid likely to be put on the table for at least another fortnight, it reiterated its recommendation of its pre-agreed merger with Restaurant Group.

One top ten shareholder said TDR's proposal was a "pretty punchy price", adding: "They knew the level they had to pitch it at and I think it's fair." He said he would accept the cash rather than opt to hang on to his shares in an enlarged Restaurant Group.

Who ends up winning the battle will hinge on which group the huge US fund manager Fidelity, which owns 21 per cent of Ask Central but also owns 10 per cent of Restaurant Group, decides to back. Fidelity showed its appetite for remaining a long-term investor in the UK's pizza sector last year when it decided to hang on to its 9 per cent stake in PizzaExpress rather than accept TDR's offer.

Greg Feehely, an industry analyst at Altium Securities, said: "It is an attractive proposal. But I would not say it is over yet."

Although Restaurant Group has already won over 46 per cent of Ask's shareholders to its offer - helped by securing the backing from its founding Kaye family - it needs 90 per cent to accept to be able to declare the offer unconditional.

Shares in Ask Central rose 19p to 209p, indicating the stock market is still sceptical that TDR, which also owns the Nando's Chicken Restaurants chain, will table a firm offer. Ask said the venture capital group's "possible offer" was "subject to pre-conditions including the finalisation of debt financing". TDR is understood to be talking to HBOS and Royal Bank of Scotland about providing the funding.

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