September 17, 2010 / 7:26 AM / 9 years ago

UPDATE 2-GBK owner Clapham agrees to Nando's offer

* Says 74p/share offer values Clapham at 30.4 mln stg

* Offer price at 8 pct premium to Clapham’s Thursday close

* Clapham shares up 7 pct (Recasts; adds analysts comments)

BANGALORE, Sept 17 (Reuters) - GBK owner Clapham House Group Plc CPH.L agreed to be bought by Nando’s chicken chain in a deal valuing it at 30.4 million pounds ($47.5 million), and became the latest UK restaurant operator to put itself in the hands of private equity.

The British unit of South Africa’s Nando’s, owned by private-equity firm Capricorn Ventures International, on Friday made a cash offer for Clapham — the owner of Gourmet Burger Kitchen (GBK) and the Real Greek — at 74 pence a share, an 8 percent premium to the stock’s Thursday close.

As of July, Clapham, which is 27 percent owned by Capricorn Ventures, had 73 restaurants across its two brands — 58 across the UK and 15 internationally.

Last month, British pubs and restaurants group Mitchells & Butlers (MAB.L) sold 333 non-core pubs to private-equity firm TDR Capital for 373 million pounds, trying to reshape itself into a food-led business in a search for higher margins. [ID:nLDE67J05T]

On Sept. 2, Carluccio’s, an Italian-themed restaurant chain, agreed to a 90 million pound takeover by Dubai-based retail, hospitality and mall manager Landmark Group, which was acting through its investment firm C1 Acquisitions. [ID:nLDE68119B]

FAIR DEAL?

Clapham House directors, who had been advised by Altium, consider the terms of the offer to be “fair and reasonable”.

“Against an increasingly competitive market, NGHL (Nando’s) believes significant investment and time are needed to re-invigorate Clapham House’s businesses,” said Nando’s, which planned to fund the deal through its cash resources.

Capricorn Ventures, which is advised by Lazard, has received support from a further 10.7 percent of Clapham shareholders.

“Considering our cautious view on the sector and in particular on the, relatively speaking, lower margin operators, we think the offer represents reasonable value,” said Seymour Pierce analyst Hugh-Guy Lorriman, who upgraded the stock to “hold” from “sell”.

On the other hand, Nick Batram of KBC Peel Hunt thinks the deal was disappointing for Clapham shareholders.

“The business has lost its way and Capricorn’s 27 percent stake was always going to be a depressing factor in terms of price,” Batram said.

Separately on Friday, M&B agreed to acquire Ha Ha Bar & Grill from Bay Restaurant Group for 19.5 million pounds as consolidation takes hold of the UK high street dining chains. [ID:nLDE68G09Q]

Clapham shares, which have risen more than 20 percent since July when it first received an offer approach, were up 7.3 percent at 73.5 pence at 0945 GMT on the London Stock Exchange. ($1=.6400 Pound) (Reporting by Tresa Sherin Morera in Bangalore; Editing by Maju Samuel)

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