PizzaExpress owner makes bid for Costa Coffee

Private equity firm Bain Capital has put in a bid to buy high street coffee chain Costa Coffee.

The investor, which has also backed Gail’s and PizzaExpress, has reportedly put in a first-round bid for the UK’s largest coffee chain through its Special Situations unit, according to the Financial Times.

The news comes a week after Wagamama owner asset management firm Apollo Global Management pulled out of the process, despite being initially interested in the sale.

It’s believed fewer proposals for the business have been received than expected, though TDR Capital, which has a controlling stake in the UK arm of fast-growing fried chicken chain Popeyes, is understood to still be in the running.

In August, Costa Coffee owner Coca-Cola began the process of selling the business it acquired less than seven years ago from Whitbread.

The sale could lead to a potential multibillion-pound loss for Coca-Cola, according to analysts, with sources suggesting the coffee chain is now worth just £2b.

At the time of the acquisition, which marked the soft drinks firm’s fourth bet on coffee, Coca-Cola said it would enable the business to become a “global coffee platform”.

But during a Q2 Coca-Cola earnings call last month, chairman and chief executive James Quincey admitted the investment in Costa was “not where we wanted it to be from an investment hypothesis point of view”.

Costa reported a pre-tax loss of £9.6m in 2023, a major drop on the £245,950 profit posted in 2022.

The group was founded by Italian brothers Sergio and Bruno Costa in 1971. It was sold to Whitbread for £19m in 1995, when it had less than 40 stores.

The chain is now a ubiquitous presence on the UK high street and operates around 2,600 cafes in the UK and Northern Ireland and more than 3,900 sites worldwide.