TGI Friday's: Sale of UK restaurants on the menu

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The Independent Online

The UK franchise of TGI Friday's, the American-themed ribs and steak restaurant chain, is to be put up for sale in the first half of this year.

Private equity group AAC Capital Partners is expected to auction its 60 per cent stake for around £50m once an agreement with co-owner Carlson, the Minneapolis-based travel and restaurant group, expires in March.

Under the terms of the deal, Carlson, which owns and operates the franchise rights to the global TGI brand, has exclusive rights to buyout AAC until March. After that, AAC can sell its stake to external parties. It is not yet clear whether Carlson will also sell its stake, though it is understood that it is willing to extend the franchise to one or two countries beyond the UK in order to attract international interest in the auction.

An adviser to sell the business is expected to be selected in the next few months, which would attract interest from the big four accountants, including Deloitte and KPMG.

AAC, which also owns magazine publisher Ocean Media and flooring manufacturer Amtico, bought the 46-strong UK franchise from leisure group Whitbread in 2007. Under private equity ownership, TGI is understood to have doubled earnings before interest, taxation, depreciation and amortisation – a key cash flow measure – to £8m-to-10m in less than three years.

It is believed that TGI's managing director Karen Forrester is considering a management buyout tilt.

Spokesmen for AAC and TGI declined to comment.