All is not well in the PizzaExpress boardroom. The decision of the chain's non-executive directors to recommend Luke Johnson's 367p a share bid leaves them looking seriously at odds with incumbent chief executive David Page, who has seen his own plans for a management buy-out scuppered.
The big question is what will Page do next?
The whole affair is looking increasingly messy. Fidelity Investments, which with a stake of almost 10% is the company's second-biggest shareholder, is said to have called for the bidding process to be scrapped until the trading environment improves.
Meanwhile, rumours persist that Capricorn Ventures, the company behind the Nando's peri-peri chicken chain, and fellow investment company TDR Capital are considering a joint bid. Over the weekend, chairman Nigel Colne looked increasingly uncomfortable, telling the press that he and his fellow non-execs would withdraw its recommendation for Johnson's £263m bid if a bigger offer was forthcoming.
To add to the confusion, on Friday PizzaExpress's share price rose to 382.5p, 15.5p above the Johnson offer.
So where does this leave David Page and his executive management team, the people still running the company day-to-day? One scenario has him arguing for what just a few days ago seemed the unimaginable – keeping PizzaExpress a public company.
He may not be able to stop the bidding, but he could try to persuade the majority of shareholders to reject all approaches. And it seems the likes of Fidelity might well support that tack.
The central argument is that the company is under-valued. Also PizzaExpress, despite its recent problems, is an essentially solid company with strong cashflows – and with the suggestion of an improving trading position. The sense is that the increase in pizza size may be starting to pay off.
Page would surely argue to be given time to turn around the business, which not so long ago was almost universally seen as the UK's casual dining leader,
In the end it will come down to numbers, and it may be that only around 30% of shareholders would stand against Page.
An intriguing option being tossed around by observers is of a share-buyback that would see those shareholders being bought out at around 400p a share by the company, using cash raised from or against those aforementioned cashflows. This might have to wait until the bidding process is complete, but the prospect might act as an inducement to reject the current offers.
A creative scenario, but stranger things have happened. Don't discount anything, especially in a week that has seen a coffee shop chain, in the shape of Caffe Nero, actually making a profit.
Whatever the outcome at PizzaExpress, the relationship between Page's executive team and the non-executives on the board hardly seems sustainable, especially as it seems that Luke Johnson has secured himself a £2.6m pay-off if he is eventually out bid.
The big question is what will Page do next?
The whole affair is looking increasingly messy. Fidelity Investments, which with a stake of almost 10% is the company's second-biggest shareholder, is said to have called for the bidding process to be scrapped until the trading environment improves.
Meanwhile, rumours persist that Capricorn Ventures, the company behind the Nando's peri-peri chicken chain, and fellow investment company TDR Capital are considering a joint bid. Over the weekend, chairman Nigel Colne looked increasingly uncomfortable, telling the press that he and his fellow non-execs would withdraw its recommendation for Johnson's £263m bid if a bigger offer was forthcoming.
To add to the confusion, on Friday PizzaExpress's share price rose to 382.5p, 15.5p above the Johnson offer.
So where does this leave David Page and his executive management team, the people still running the company day-to-day? One scenario has him arguing for what just a few days ago seemed the unimaginable – keeping PizzaExpress a public company.
He may not be able to stop the bidding, but he could try to persuade the majority of shareholders to reject all approaches. And it seems the likes of Fidelity might well support that tack.
The central argument is that the company is under-valued. Also PizzaExpress, despite its recent problems, is an essentially solid company with strong cashflows – and with the suggestion of an improving trading position. The sense is that the increase in pizza size may be starting to pay off.
Page would surely argue to be given time to turn around the business, which not so long ago was almost universally seen as the UK's casual dining leader,
In the end it will come down to numbers, and it may be that only around 30% of shareholders would stand against Page.
An intriguing option being tossed around by observers is of a share-buyback that would see those shareholders being bought out at around 400p a share by the company, using cash raised from or against those aforementioned cashflows. This might have to wait until the bidding process is complete, but the prospect might act as an inducement to reject the current offers.
A creative scenario, but stranger things have happened. Don't discount anything, especially in a week that has seen a coffee shop chain, in the shape of Caffe Nero, actually making a profit.
Whatever the outcome at PizzaExpress, the relationship between Page's executive team and the non-executives on the board hardly seems sustainable, especially as it seems that Luke Johnson has secured himself a £2.6m pay-off if he is eventually out bid.
