Tesco’s sale of the Giraffe restaurant business, which it acquired three years ago for £48.5m, has edged closer.
Sky News has reported that the chain is set to be sold to an unidentified family office vehicle which has existing restaurant assets in the UK. It is thought that a deal could happen later today.
One analyst suggested to Sky News, that the c60-strong Giraffe, which Tesco placed on the market earlier this year, would be “all but given away”.
Previous owner Luke Johnson and Casual Dining Group had both been linked as suitors for the business, which is chaired by former Mitchells & Butlers chief executive Adam Fowle.
Current EBITDA for the business is £3.6m, with a projected run rate of nearer £5m, which would value the group at over c£35m.
Site EBITDA is currently thought to be running at c£7m. However of that, the jewel in the chain’s estate, its restaurant at Royal Festival Hall, contributes £2m. MCA understands that some parties have valued the business at as low as £20m.
At the same time, MCA understands that bids have been submitted for the supermarket chain’s café business Harris + Hoole, with a private equity firm, who will back the existing management team, believed have taken a lead in the process.
It is believed that Caffe Nero, which acquired three Harris + Hoole sites last year, has also shown an interest in securing further units from the business. Tesco acquired the remaining stake in Harris + Hoole from the Tolley family in January.