Pizza Express on way to market

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The Independent Online
PIZZA EXPRESS, the restaurant chain, is joining the stock market with a pounds 14.6m reverse takeover of Star Computer, the shell company whose shares have been in suspension at 47p since Christmas.

The deal will result in Peter Boizot, the majority shareholder of Pizza Express, owning 15 per cent in the enlarged group. He will also become its chairman.

Founded in 1965, Pizza Express operates through 52 franchised and 19 company-owned outlets and is also the sole UK importer of Peroni, the Italian beer.

The terms of the deal include the purchase of G&F Group, its largest franchisee which runs nine restaurants under its label.

About pounds 4.5m of the total consideration is being met by the issue of shares to the vendors. Another pounds 9.8m cash payment is being met with a share placing at 40p.

Star, which will be renamed, is also raising another pounds 4.1m with a three-for-two rights issue to repay the group's borrowings.

Pizza Express made a pre-tax loss of pounds 546,000 in the year to 28 June, reflecting bad debts of pounds 419,000 and a property writedown of pounds 636,000. However, in the 16 weeks to 18 October it returned to the black with a taxable profit of pounds 337,000 on sales of pounds 5m.

G&F made taxable loss of pounds 72,000 in 1991 but returned to a pounds 75,000 profit in the first nine months of last year.

However, the enlarged group's pro forma historic profits are put at pounds 2.4m on sales of pounds 28.4m. Net assets are estimated at pounds 7m.

The pizza chain believes that its listing will enhance its brand profile and growth prospects. It aims to expand by opening new in- house restaurants through franchising.

The company says that the pizza-to-pasta restaurant market has doubled to an estimated value of pounds 674m since 1987 and is also the fastest-growing segment of the catering trade.

Whereas most pizza chains aim at the lower end of the market, Pizza Express says it is designed to appeal to affluent and professional customers.

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