Fulham Shore shares surge after Franco Manca and The Real Greek owner agrees to £93m takeover by Japanese food business
- Fulham Shore agrees to sell business to Japanese operator of Marugame Udon
- Shares in London-listed Fulham Shore surged over 30% today
Fulham Shore, which operates The Real Greek and Franco Manca restaurants, has agreed to be bought-out in a £93million deal.
Japanese buyer Toridoll is offering 14.15p a share for Fulham Shore, representing a premium of more than a third to Tuesday’s closing price.
Fulham Shore shares soared over 30 per cent or 3.4p to 13.90p this afternoon, but have fallen by about 15 per cent in the last year.
Takeover deal: Japanese buyer Toridoll is offering 14.15p a share for Fulham Shore
The bidder thinks Fulham Shore offers the opportunity to expand the business in the UK, internationally, and through product sales in shops.
The proposal comes from Great Sea Kitchens, a newly-incorporated company set up on behalf of dining giant Toridoll which has 5,500 stores and is behind brands like Marugame Udon. It is working with private equity firm Capdesia.
David Page, executive chairman of Fulham Shore, said: ‘Whilst we remain excited about the prospects for the business on a standalone basis, we have been in discussions with both Toridoll and Capdesia and received a proposal that we believe is compelling for all of our stakeholders.
‘We believe Toridoll and Capdesia’s experience in successfully building restaurant businesses and their long-term vision for Fulham Shore, will enable Fulham Shore to fulfil its long-term potential.’
Capdesia is a London and Brussels-based private equity business that focuses exclusively on restaurants.
In a trading update today, Fulham Shore said its Franco Manca and Real Greek restaurants delivered ‘creditable’ underlying performances despite industrial action, social disruption and the cost-of-living crisis.
The group, which has 97 branches, notched up record sales of around £100million 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 yet again by attracting a takeover bid for his restaurant business, Fulham Shore. Japanese group Toridoll has swooped in, spying an opportunity to expand the group’s Franco Manco brand across the UK and overseas.
Share surge: Franco Manco owner Fulham Shore saw its share price rise over 30% today
‘For executive chairman Page, it’s the latest tick in the box for a career that has seen him build up a series of restaurant businesses and then sell them. He was a key figure in the roll-out of Pizza Express which subsequently was bought by private equity firm TDR Capital, and then again with Gourmet Burger Kitchen which was acquired by Nando’s owner.’
She added: ‘A good restaurateur spots a gap in the market, rolls out a proposition with a close eye on costs and getting good deals on leases, and then waits for it to build scale before selling the chain.
‘One might argue that the 14.15p takeout price for Fulham Shore doesn’t fully price in its potential. Eighteen months ago, it was trading close to 20p a share, after all.
‘But in an economically uncertain environment, the price on the table might seem reasonable given the circumstances and possibly the best deal that could emerge for some time.’
In November Fulham Shore gave a bullish trading update but warned it faced a situation that was more ‘unstable than at any time in recent memory’.
At the time, Aim-listed Fulham Shore could not say how trading would develop in 2023 as costs soared and consumer confidence fell.
But the restaurant group, which also owns The Real Greek chain, said economic gloom would not affect openings and had not slowed its sales growth.
In the six months to the end of September, trading was in line with expectations, with sales 35 per cent higher than pre-Covid levels. Sales were also 25 per cent higher than the same time a year earlier.
