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Mon 1st Jan 2018 - Sky News – Patisserie Valerie preparing £35m share issue to help fund Gail’s takeover bid
Patisserie Valerie preparing £35m share issue to help fund Gail’s takeover bid: Patisserie Valerie is preparing to tap investors for tens of millions of pounds as part of plans for a takeover bid for the company that owns Gail's Bakery. Patisserie Holdings, which is listed on the London Stock Exchange, is drawing up plans for a placing of new shares to raise about £35m towards the cost of a deal, reports Sky News. Patisserie Holdings’ current market value is just over £350m, meaning if it took place now, a £35m placing ‎could be organised without giving existing shareholders the right to pre-empt it. Leading Patisserie Holdings shareholders are likely to be enthusiastic about such a fund-raising, given the stock's performance ‎since it floated and the fact the company's executive chairman – sector investor Luke Johnson – also owns Gail's parent, Bread Holdings. A deal is unlikely to be agreed until March, according to insiders, and Johnson is not involved in the negotiations because of the potential for his dual role to create a conflict of interest. Johnson’s private equity firm, Risk Capital Partners, hired advisers in the autumn to explore options for a sale, and other prospective bidders are said to have expressed interest in the chain. Some industry-watchers have suggested Bread Holdings could command a price of more than £150m. Risk Capital holds a majority stake in Bread Holdings, alongside the bakery group's management, including chief executive Tom Molnar. Molnar established the business with Ran Avidan, naming it after Gail Mejia, who was a supplier of premium bread to restaurants. Its first site opened in Hampstead, north London, in 2005. The company, which now trades from nearly 40 Gail's-branded outlets, has grown significantly since Johnson invested in 2011. Its retail operations are concentrated in affluent London locations with high footfall, and it has further plans to expand both retail and wholesale operations. Last month, Bread Holdings reported turnover increased 24% to £78,956,368 for the year ending 28 February 2017 compared with £63,750,696 the previous year. Gail’s saw turnover rise by 30%.

Deltic Group eyes bolt-on acquisitions as it lines up expansion drive: Deltic Group, the UK’s largest operator of premium late-night bars and clubs with 57 venues, is eyeing bolt-on acquisitions as it lines up an expansion drive. Chief executive Peter Marks said the company wanted to snap up profitable businesses and had doubled the size of its property department to help spearhead growth. While potential deals will be funded by existing cash flow, Marks said he would call on the support of shareholders or private equity firms if “something that looked a bit tasty” came into his sights. He said after 35 years of experiencing the ups and downs of the night-time economy, now was a good time for the business to invest. He told the Press Association: “We are now actively looking at building up a pipeline and we’ve doubled the size of our property department to do that. We are going to be looking at individual successful going-concerns on a piecemeal basis. We are going to be looking at new sites and to develop the Bar & Beyond brand as well as one or two of the club brands.” Asked which areas the group is targeting, he said: “We have nothing in Manchester, Liverpool, Glasgow and Newcastle, so obviously they are in the mix.” Deltic had become embroiled in a tussle for Revolution Bars, tabling an all-paper merger that would have seen Revolution own 65% of a combined entity and Deltic 35%. However, its overtures were rejected as Revolution eyed a takeover from Stonegate Pub Company, which collapsed in October after Revolution investors snubbed a £101.5m buyout bid. Since then, Deltic has snapped up 1.5 million shares – or a 3% stake – in Revolution. Deltic saw like-for-like sales climb 9.1% to £16.4m over the September to October period. Marks said the company was trading in line with expectations and was on track to beat the market. He said the company had capitalised on the demise of its rivals, while boosting footfall by refurbishing its estate. He added: “Something like 40% of the nightclubs have closed over the past ten years, which has been a good thing because it means that those of us that are left, who have got invested businesses in good towns with high employment and decent prospects, are prospering.” While Deltic is not engaged in active talks with any private equity houses, Marks said the company’s eyes and ears remained open. “We have had one or two discussions with private equity,” he added. “They are quite interested in our space and they are beginning to understand that food has got a bit more difficult and wet-led businesses are getting a bit easier. We have had approaches, but nothing that has been worth doing at this moment in time because we want to make sure that the business is bang on and we have got a great story.”

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