Moguls vie to buy the Groucho, if it will have them

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The Independent Online

He is one of the country's foremost celebrity public relations experts, who happens to be stepping out with the daughter of one of the world's biggest media moguls. And now he wants to buy one of London's most important watering holes frequented, of course, by celebrities and media.

He is one of the country's foremost celebrity public relations experts, who happens to be stepping out with the daughter of one of the world's biggest media moguls. And now he wants to buy one of London's most important watering holes frequented, of course, by celebrities and media.

Matthew Freud is preparing a bid for the Groucho Club, Sunday Business reported yesterday. Freud, a member of the club, is understood to have secured backing for his bid from the venture capital company Apax Partners. A member of the club, Freud is among about half-a-dozen bidders who have expressed an interest in buying the Soho club.

Last April it was reported that Benjamin Fry, an old Etonian, had written to the club's directors with a takeover proposal. Mr Fry wants to open Grouchos in other European cities and in Los Angeles as well as giving the name to his two hotels in Chelsea and Notting Hill, west London. His mission, he said was to "exploit the Groucho, but not to cheapen it".

After Tony Mackintosh, the club's chairman and biggest shareholder, turned down his offer, Mr Fry wrote directly to each shareholder, including the Hollywood actor Steve Martin, the author Salman Rushdie, Julie Christie and Anna Ford. In two letters to the 350 shareholders, Mr Fry said he would pay 230p a share for the club, valuing it at £10.1m. On Friday the shares closed up 15p at 160p.

Sources close to Mr Fry said yesterday that he was still putting together a deal and had been conducting talks with Mr Mackintosh for several months.

Any bid for the club will have to exceed £11m but Freud, a millionaire in his own right is unlikely to be fazed by that. He sold his PR company Freud Communications to Abbot Mead Vickers for £10m in 1998 and has acquired celebrity status because of his relationship with Elisabeth Murdoch, who is expecting their baby in November. Freud was not available for comment yesterday.

The club's name was inspired by the famous Groucho Marx quote that he would not join any club that would have him as a member. It was founded in 1984, and quickly became a bohemian alternative to the rigid formality of the gentleman's club.

But in recent years it has been eclipsed by its younger and trendier rivals Soho House and Home House. Last year the Groucho made a pre-tax profit of £650,000 and Fry is said to have spotted the potential to turn it into a serious money spinner if he can persuade the shareholders to sell.

Mr Mackintosh owns 17 per cent of the Groucho and if Mr Fry, or any other bidder is to succeed, they will need support from the shareholders who control 67 per cent. If Mr Mackintosh agrees to Mr Fry's terms, he stands to make £1.75m.

A spokeswoman for the Groucho said yesterday that the club was making no comment. "Various people have come out of the woodwork since Mr Fry made his initial offer but everything is so preliminary that we cannot comment. There are no significant developments at the moment," she said.

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