TDR Capital and Capricorn Ventures, two private equity firms, have agreed to sell their 25.1% stake in Gondola, a quoted UK pizza restaurant group, to Cinven, a European buyout group, for £135 million (€199.5 million; $253 million), should it go ahead.
The two private equity shareholders, which floated Gondala in 2005, have signed a scheme of arrangement to sell their stake in the company for 400p a share, while Cinven has said it is considering making an offer for the rest of the company at 415p a share, valuing it at £559 million.
The arrangement, which will give Cinven a degree of certainty ahead of a formal bid, means TDR and Capricorn lose out on an additional £5m on offer to other shareholders.
TDR and Capricorn have also undertaken to vote against any competing bids below 456.5 pence a share.
In the event a higher bid is accepted, TDR and Capricorn have agreed to pay a break fee of no less than £15million or 25% of the difference between Cinven’s 415 pence a share offer and the rival offer on their shares.
The undertakings lapse on 31 December 2006 or two months after Cinven makes a firm offer through its bid vehicle Paternoster Acquisitions.
Merrill Lynch is advising Gondola on the approach, less than a year after acting as global co-ordinator, and joint bookrunner with Deutsche Bank and Goldman Sachs, on the flotation of the private equity backed group last November.
The potential bid price offers a 30% premium to Gondola’s float price of 320 pence, when it raised £135 million, valuing the company at £431 million.
Freshfields Bruckhaus Deringer, an international law firm, advised the bookrunners on the float and is advising Paternoster and Cinven.