Former coffee bar operator Madisons Coffee said today that its talks to buy restaurant chain Bel and the Dragon were "proceeding satisfactorily".
It added that if the deal comes off, the company would expect to pay about £6.75m for the chain.
The company, which also today confirmed its change of name to Gourmet Holdings, hopes to make a further announcement about the possible takeover shortly.
It said trading since 11 January, the second half of its financial year, had continued to be satisfacory.
Results for the full year, ending on 27 June, would "moderately exceed the market's expectation".
The change of name is to reflect the fact that the group has now sold off its coffee bars to concentrate on restaurants, including its Richoux chain.
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