PAI to lead PizzaExpress buyout

The French buyout firm is backing a £250m management buyout of the UK pizza chain.

PAI Management, the French private equity house which closed its first independent fund on E1.8bn last summer, looks set to deepen its focus on the European food industry with a management-backed £250m bid for UK pizza chain PizzaExpress.


PAI, led by Amaury-Daniel de Seze, is preparing to offer 350 pence per share, equivalent to £251m, at the top end of the 330 to 350 pence indicative offer made by co-founder Hugh Osmond in November. Other bidders include Luke Johnson, reportedly backed by ABN Amro Capital, and another unnamed private equity house.


According to sources, PAI Management is thought to be most likely to acquire the business, which operates 311 pizza restaurants worldwide, as well as the UK-based Café Pasta chain.


The European food industry has been a fertile hunting ground for PAI Management recently. Last year the firm acquired a large majority stake in Marseille-based pasta producer Lustucru for E500m, a bolt-on to portfolio company Panzani. PAI also invested in the E500m buyout of food producer Yoplait and teamed up with CVC Capital Partners to acquire animals feeds manufacturer Provimi, a former division of Edison, for almost E200m.


Announcing its interim results earlier this week, the PizzaExpress board confirmed that it had received ‘a number of approaches’ since December, adding that the discussions were well advanced and that an announcement was likely to be made ‘in the near future’.


PizzaExpress has appointed three independent non-executive directors which have formed a committee to work alongside advisors Credit Suisse First Boston to manage the bid process with all interested parties. 


In the six months to 31 December 2002, the company reported ‘continued disappointing trading’ in its PizzaExpress restaurants especially in central London. Group turnover rose 7.9 per cent to £112m (2001: £103.8m).  Pre-tax profits fell by 18.3 per cent to £17.8m.