Restaurateurs 'Hughie and Louie' deny they are feuding over investments

They used to be so close that the City called them "Hughie and Louie", but speculation grew yesterday that a fallout between Hugh Osmond and Luke Johnson would become a fight over some of the country's best-known restaurants.

There was a ripple of excitement when Mr Osmond, chairman of Punch Taverns, was unveiled as a mystery investor in the Belgo chain founded by his one-time best friend Luke Johnson.

The two were inseparable as they blazed a trail across the capital's restaurant landscape in the 1990s, notably for the meteoric success of their PizzaExpress chain. But since a row over both men's unsuccessful attempts to buy the Whitbread pub chain last year, a hint of bitter rivalry has entered their relationship.

Mr Johnson and his colleagues at the Belgo group, which owns The Ivy and Le Caprice, are known to have been concerned for some time over the acquisition of 14 per cent of the company by a Virgin Islands-registered company, Kintaro International, whose owners remain a mystery.

The company bought the stake from the Swiss financial services group Zurich Scudder, which had been Belgo's biggest shareholder. Imagine the boardroom scenes, then, when another 2 per cent buyer turned out to be Mr Osmond.

Yesterday, Mr Johnson demonstrated a prickly exterior when asked whether he was worried that his old friend was trying to muscle in on the mussel-and-chips chain.

So, were they still close or were they heading for a feud? "No comment," Mr Johnson said. "That's C-O-double- M-E-N-T."

He is thought to remain sore over a legal move by Mr Osmond last year when, during a £1.6bn fight over more than 3,000 Whitbread pubs, Mr Johnson had to back out with his rival bid because he had signed a "no compete" clause two years earlier as a director of Punch Taverns.

Yesterday, Mr Osmond denied the knives were out for his former friend. He said he bought the shares because they were valued at a "good" price at 1.25p. He also said he had nothing to do with Kintaro.

"Naturally, I would have preferred it if Luke hadn't found out I'd bought 2 per cent, but it's out now. In a way, he should see it as a compliment; I certainly wouldn't invest my money in a company that was run by someone who was rubbish. It's only 2 per cent, though. You could hardly say it represented a takeover."