Buyout bid for Gerard restaurants

PARAMOUNT, owner of the Chez Gérard-to-Bertorelli's restaurant chain, could be taken private for £28m under plans from shareholder Guy Naggar.

Corporate finance veteran Naggar led the takeover of Groupe Chez Gérard last April for £15.4m with the backing of JO Hambro Capital Management funds.

He now plans to fund part of the buyout with his own money, along with his long-term business partner Peter Klimt.

Both men have recently been buying shares in the company. The deal would be priced at 35p a share, according to a stock market statement.

While some of JO Hambro's funds would use the deal to exit the investment with a tidy profit, other Hambro funds will probably be used to back the buyout. It currently owns 67% of Paramount.

Chief executive Nick Basing, credited for a dramatic turnaround in Chez Gérard's fortunes over the past year, would continue running the business.

One source said: 'When Paramount bought Chez Gérard last year, shareholders had a choice of shares or 20p cash. If this deal happens, those who took the shares will get 35p back.'

It is not believed any investors outside the Naggar-Klimt-Hambro camp are yet involved, although talks are at very early stages. Private-equity dealmakers suggested today's announcement, issued after a sharp rise in the share price, could flush out venture capitalist bidders.

Gresham, ECI, Close Brothers and Hg Capital were touted as possible bidders, although none is believed to have made an approach yet.

Naggar and Klimt bought two million shares at 27p and 28p in March, taking their total stakes up to 12.4% and 2.8% respectively.

The pair, who have been doing deals together for 22 years, are generally long-term holders of their investments, which include the Dawnay Day finance house.