Pelican calls for pounds 20m to buy Forte outlets: Rights issue will fund acquisition of Dome Cafes - Hunters Armley aims to raise pounds 9.4m to pay off borrowings and fund capital investment

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The Independent Online
PELICAN, the USM-quoted restaurant group, is calling on shareholders for pounds 20m to buy 16 outlets from Forte and fund further expansion.

The deal includes purchase of Forte's Dome Cafes, most of which will be turned into Cafe Rouge outlets, Pelican's restaurant chain which operates throughout London.

Forte will receive pounds 11.5m for 13 Dome Cafes and three other outlets in the capital, with the balance used for conversion of the properties and the opening of other restaurants as Pelican expands outside London.

The five-for-nine rights issue at 80p is fully underwritten by UBS. Pelican's shares closed up 4p at 95p. Yesterday's announcement included a pre-tax profit forecast showing that Pelican expects to make not less than pounds 2.5m in the year to 31 March, up from pounds 1.25m. After the deal Pelican's gearing will be zero.

All but one of the Dome Cafes make profits, although several are just above even level. Roger Myers, Pelican's chairman, said the Domes make an average of pounds 180 per square foot, compared with pounds 260 at Cafe Rouge. 'That's a measure of how much more we can squeeze out of them,' he said.

The other three outlets included in the deal are Forte's successful Oriel, in Sloane Square, and two bars in West London.

Seven of the properties are freehold. Assets of all the properties are put at pounds 11.5m, and turnover last year at pounds 6.9m ( pounds 6.6m).

Mr Myers had been trying to buy Dome Cafes for about three years, although Forte refused to put them up for sale until it decided to concentrate on its core hotel business 18 months ago.

Pelican, whose non-executive director and 11 per cent shareholder is Robert Earl, the man behind the Planet Hollywood burger restaurants, has applied for a full listing on the Stock Exchange. Pelican also intends to open more Mamma Amalfi Italian restaurants this year. Other operations are Dragon Inns and Tu Tu Tango in America, run by Mr Earl.

Hunters Armley, the Leeds- based commercial printer, is to raise pounds 9.4m in a rights issue.

The company wants the money to pay off pounds 3m of borrowings and fund capital investment in the business.

It has bought a freehold property in Bradford and has bought new printing machines. Hunters specialises in large orders from holiday companies to print brochures and in the production of direct-mail literature.

The money will be raised in a one-for-four cash call pitched at 192p. Hunters was floated on the Stock Exchange in December 1992 at 90p. The shares have risen steadily ever since and closed at 225p, down 9p, yesterday. The closing price was the same as the theoretical ex-rights price.

(Photograph omitted)

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