Shares of Fulham Shore soar after Franco Manca and the owner of The Real Greek agreed a £93m takeover by the Japanese food company
- Fulham Shore agrees to sell business to Japanese operator Marugame Udon
- Shares of London-listed Fulham Shore are up more than 30% today
Fulham Shore, which operates The Real Greek and Franco Manca restaurants, has agreed to be bought out in a £93 million deal.
Japanese buyer Toridoll is offering a share of 14.15 pa for Fulham Shore, a premium of more than a third over Tuesday’s closing price.
Fulham Shore Shares rose more than 30 percent or 3.41p to 13.91p in late morning trading, but fell about 15 percent over the past year.
Takeover deal: Japanese buyer Toridoll offers 14.15pa share for Fulham Shore
The bidder believes Fulham Shore offers the opportunity to expand the business in the UK, internationally and through in-store product sales.
The proposal comes from Great Sea Kitchens, a newly formed company created on behalf of dining giant Toridoll, which has 5,500 stores and is behind brands like Marugame Udon. It partners with private equity firm Capdesia.
David Page, executive chairman of Fulham Shore, said: ‘While we remain excited about the prospects for the standalone business, we have been in discussions with both Toridoll and Capdesia and have received a proposal that we believe will appeal to all our stakeholders.
“We believe that Toridoll and Capdesia’s experience in successfully building restaurant businesses and their long-term vision for Fulham Shore will enable Fulham Shore to realize its long-term potential.”
Capdesia is a private equity firm based in London and Brussels with a sole focus on restaurants.
In a trading update today, Fulham Shore said its restaurants Franco Manca and Real Greek delivered “creditable” underlying performance despite industrial action, social disruption and the cost-of-living crisis.
The group, which has 97 branches, posted record sales of around £100 million in the year to March.
Danni Hewson, head of financial analysis at AJ Bell, said: ‘Named after his father’s love of Fulham FC, David Page has scored again by securing a takeover bid for his restaurant business, Fulham Shore. Japanese group Toridoll has burst in and spied an opportunity to expand the group’s Franco Manco brand in the UK and beyond.
Share price rise: Franco Manco owner Fulham Shore saw its share price rise more than 30% today
For Executive Chairman Page, this is the final tick in the box for a career where he has built a string of restaurant businesses and then sold them. He was a key figure in the rollout of Pizza Express, which was then bought by private equity firm TDR Capital, and then back at Gourmet Burger Kitchen, which was acquired by Nando’s owner.”
She added: ‘A good restaurateur sees a gap in the market, rolls out a proposal with a keen eye on costs and getting good deals on leases, then waits for it to scale before selling the chain.
“You could say that the 14.15 pence pick-up price for Fulham Shore doesn’t fully price in its potential. After all, eighteen months ago it was trading close to 20 pence per share.
“But in an economically uncertain environment, the price on the table seems reasonable given the circumstances and possibly the best deal that could emerge over time.”
In November, Fulham Shore issued a bullish trading update, but warned it was facing a situation that was “more volatile than ever before.”
At the time, Aim-listed Fulham Shore could not say how trade would develop in 2023 as costs soared and consumer confidence plummeted.
But the restaurant group, which also owns The Real Greek chain, said economic gloom would not affect openings and would not have slowed sales growth.
In the six months to the end of September, trading was in line with expectations, with sales up 35 percent on pre-Covid levels. Turnover was also 25 percent higher than in the same period a year earlier.