Johnson may add new topping to £278m PizzaExpress offer

The battle to win control of PizzaExpress intensified yesterday after the pizza chain agreed to a new £277.8m takeover from GondolaExpress – whose backer owns a stake in the Nando's chicken restaurant chain.

The 387p-a-share cash offer trumped the previous recommended bid made by Luke Johnson, who had put together a cash deal of 367p-a-share through his Venice Bidder vehicle.

Mr Johnson responded to the move yesterday by saying he was considering whether to raise his offer above 387p although he is unlikely to show his hand until after his rival's offer document has been published. Shares in PizzaExpress closed up 10p at 389.5p.

"We believe the offer [from GondolaExpress] to be fair and reasonable," said the PizzaExpress chairman, Nigel Colne. "We felt 367p [from Mr Johnson] was fair and reasonable but we feel 387p is even more fair and reasonable."

Mr Colne said the pizza chain would not hesitate to switch allegiances again if Venice Bidder came back with a better deal. "The process is aimed at creating the highest price," he said.

The offer by Gondola, backed by the private-equity firm TDR and Capricorn, which owns 47 per cent of Nando's, has won the backing of shareholders who speak for 14.3 per cent of PizzaExpress's equity.

"We believe PizzaExpress is quite simply the premier pizza brand in the UK and we feel we can work closely with the company in the private arena to bring a fresh approach to a number of the difficult issues it is facing at this stage in its development," Robbie Enthoven, of Capricorn, said.

Trading at PizzaExpress, which has been under pressure for some time, has deteriorated further since the start of the year.

Mr Colne emphasised, however, that the company had a strong brand name and was profitable. "From what's written about us sometimes, you'd think it was a basket case," he said, adding: "It has huge potential and it's profitable."

Venice Bidder, which controls around 8.7 per cent of Pizza Express shares and whose offer has won acceptances, giving it just over 14 per cent, will announce today what the latest level of acceptances for its deal are.

It will be entitled to a break fee of £2.6m if the GondolaExpress deal goes through, while GondolaExpress will get a £2.78m break fee if a higher deal is done with Venice.

Mr Colne insisted PizzaExpress would only have to pay one break fee and emphasised it was common practice. He said 18 out of 20 cash deals over £250m in value in the past three years had contained break-fee arrangements.

Separately, the rival pizza outfit Domino's Pizza said yesterday it would create 1,500 jobs by opening 50 more stores in the UK and Ireland this year.