PizzaExpress owner gets bid approach

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The restaurant group, which floated on the London Stock Exchange at 320 pence per share last November after being taken private in 2003, said in a statement the approach was worth 415p per share in cash.

The firm, which also owns the ASK and Zizzi chains, declined to name its suitor.

Analysts said it was likely to be a private equity firm, but were divided on whether 415p a share represented a good price.

Altium Securities' Wayne Brown thought Gondola was worth closer to 450p a share. He said the stock had been held back since its flotation by fears that venture capital firms TDR and Capricorn Ventures were looking to sell down their combined stake of about 48 percent.

Gondola shares spent much of the summer trading close to their 320p flotation price they closed at 318p last Thursday but rose from there to a 362p close on Tuesday. At 2:40 p.m., the stock was up another 12.2 percent at a fresh high of 406 1/4p.

At this price, the stock is trading at about 16 times forecast earnings, well below rival The Restaurant Group at 21 times, Altium Securities' Brown said.

Another analyst who declined to be named, however, thought 415p a share was a good price.

"The business has already been fairly highly leveraged and substantially the trading has been turned around over the past couple of years, so the upside from here is difficult to see. That said, they are highly cash generative," the analyst said.

Gondola, which runs about 320 PizzaExpress restaurants, said in July that like for like sales rose 4 percent in its last financial year, which ended July 2, helped by regular menu changes and a drive to use better quality ingredients.

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