Guy Naggar, who with his business partner Ralph Elman has tabled a £20.8m indicative bid through the cash shell Paramount for Group Chez Gerard, said yesterday he had held what he described as "friendly" negotiations with Chez Gerard's founder and chief executive, Neville Abraham,

Groupe Chez Gerard plunged into the red after the collapse of its expansion plans, and Abraham, 65, returned to run the group.

Paramount, which has a 3% holding in Chez Gerard, indicated it would be willing to offer five of its shares for each Chez Gerard share. There would also be an underwritten cash alternative of 100p a share.

The company, a cash shell since the sale of its chain of 158 tenanted pubs two years ago, has already received letters of support for its proposed offer from holders of a further 47.8% of the shares. Its supporters include JO Hambro, the fund management group that bought a 25% stake in Chez Gerard last year.

However, its support does not include the holdings of Abraham and the rest of the board, who have about 18% of the shares between them.

A firm offer from Paramount would be subject to due diligence. Chez Gérard said yesterday there could be no certainty that an offer would emerge.