Patisserie Valerie is lining up a bid for fast-growing artisan cafe chain Gail’s, it was claimed yesterday.
Gail’s has been trading for 12 years, opening its first site in North London and expanding to 40 branches, with a particular focus on affluent London locations in busy areas.
According to Sky News, Patisserie Holdings is drawing up plans for a placing of new shares to raise about £35m towards the cost of a deal.
It suggests that leading Patisserie Holdings shareholders are likely to be “enthusiastic” about such a fundraising, given the stock’s performance since it floated and the fact that the company’s executive chairman – restaurant tycoon Luke Johnson – also owns Gail’s parent, Bread Holdings.
Insiders have told it that a deal is unlikely to be agreed until March, and Mr Johnson is not involved in the negotiations because of the potential for his dual role to create a conflict of interest.
The entrepreneur’s private equity firm, Risk Capital Partners, hired advisers in the autumn to explore options for a sale, and other prospective bidders are said to have expressed interest in the chain, Sky News reported.
The report added that some industry-watchers have suggested that Bread Holdings could command a price tag of more than £150m.
Talk of an acquisition comes as Patisserie Valerie explores ways to scale its business further.
Last month FEJ revealed that the group is considering opening a new production facility in the North West that will serve more than 70 of its stores.
Although it claims to have excess capacity in its main Birmingham bakery and seven UK satellite bakeries, bosses at the firm are conscious that as its geographical footprint expands it might need to enhance the way stores are supported.