Loch Fyne Restaurants has revealed how its managers reaped the rewards of its £68m acquisition in August by brewer and pub operator Greene King.
Speaking to an audience of hospitality investors at law firm Berwin Leighton Paisner last week, Loch Fyne chief executive Mark Derry said some managers made an extraordinary profit on shares they held in the business following this summer's acquisition.
"In January of this year we started up a scheme for our next tier of managers which allowed them to buy shares in the company for 10p a share," he said. "They sold those shares for £29.70."
The £68m bid came just 23 months after Loch Fyne was bought in October 2005 for £30m by private equity firm Hutton Collins, and Derry admitted the Greene King offer had exceeded his expectations, although he revealed that an unnamed bidder had actually offered more.
"The bid for me was at the top end of the market. We did all right, and nobody would say we sold it short," he said. "The guys at Greene King were quite sanguine about it [the fee]. They are in this for the long haul. Was it at the top of the market? I suspect so, but that's all right."
Greene King proposes to increase the number of sites by 20% by April 2008, and Derry insisted there was plenty of room for more Loch Fyne restaurants in the UK.
"It is not going to be my final decision, our new owners will make those decisions, but my position is we have 40 sites doing £25,000 a week," he said. "We could do a hundred of these businesses. We have four in Surrey five miles apart and they still average £28,000 a week."
By Christopher Walton