Boardroom boost for Paramount's Chez G‚rard bid
Paramount, the cash shell bidding for Groupe Chez Gérard, has received backing from the restaurant company's independent directors after a management buyout (MBO) attempt led by executive chairman Neville Abraham failed.
The MBO team announced last week that they were unable to make an alternative offer to Paramount's £15.6m bid for the group in the timescale laid down by Paramount.
Founder of the Chez Gérard, Livebait and Bertorelli's brands, Abraham said he was disappointed but philosophical about the failed MBO attempt.
"Paramount's bidding coincided with the industry being at its most vulnerable. It's been a difficult winter and a harder spring. With bombs falling it's not the best time to put forward an alternative," he said.
The group's independent directors have recommended that shareholders accept the group's bid, but have argued that investors should accept the 75p cash offer per share rather than the alternative of 3.75 Paramount shares for every Chez Gérard share.
Abraham said the cash offer was preferable because the offer of Paramount shares would be likely to leave investors as minority shareholders in a delisted company.
He also argued that the directors had not seen a business plan from Paramount and the shell had shown no knowledge of the sector.
"Why would anybody want to accept Paramount paper shares when they are a cash shell with no experience in restaurants?" he asked.
Paramount intends to appoint Nick Basing, a former executive with Rank and Unilever, as chief executive. Ian Neill, chief executive of Wagamama, is to be non-executive director.
Abraham said he had "no idea" what he will do when he leaves the group. He was optimistic for his creation, however, and believed it still had a future as a brand.
He said: "Chez Gérard is 25 years old and has survived foot-and-mouth and several recessions. It's resilient and will always be a profitable business."
Groupe Chez Gérard
Founder and chairman: Neville Abraham
Employees: 877
Annual turnover 2002: £37.6m
Pre-tax losses 2002: £3.3m
Annual turnover 2001: £37.7m
Pre-tax profits 2001: £2m
Restaurant Portfolio
Chez Gérard: 12
Livebait: 13
Bertorelli's: four
Livebait Café Fish: one
By Helen Adkins
