Inside Track by Dominic Walsh
You have to hand it to Steve Hill. The chief executive of Wagamama could not have timed his appearance as a speaker at M&C Report’s Restaurant Conference last week better.
As the last three bidders in the auction of the fast casual noodle bar chain were considering how much to offer in the final round of the process, Hill stepped up to the lectern to explain how he believed the company had the scope to open as many as 650 outlets under its management in the US. If that wasn’t a call to arms to the remaining bidders, I don’t what is.
Just days earlier, it had emerged that Morgan Stanley’s private equity unit, Investcorp and India Hospitality Corporation were the three companies that had made it through to the business end of the Wagamama sale process. While Morgan Stanley was immediately installed as the bookie’s favourite, commentators in India reckon IHC is the frontrunner after indicating it would be prepared to put almost £250m on the table.
If that is indeed the right number – comfortably above the lower end of the indicated £230m to £260m range - then expect IHC to emerge triumphant as my understanding is that, as of late week, the two financial bidders were in the £200m to £210m bracket.
While IHC is a small company in terms of its market cap on AIM, it does not lack for ambition and any equity fundraising is likely to be well supported by the Indian business community. What’s more, just take a look at all the recent big restaurant deals.
In almost every case – Clapham House and Carluccio’s being the obvious examples – the buyer was an overseas company with a special reason for bidding rather than a traditional trade or financial buyer.
Ramsay’s resuscitation
Gordon Ramsay must feel like his picture has been cut out and pinned to a dartboard for the media to throw arrows at. Every fact of his life, both private and business, seems to be fair game to the redtops, in particular. One theory doing the rounds in the wake of the abrupt exit of Chris Hutcheson as his business partner is that he was thinking about buying a home in Los Angeles and it was when he had a close look at the company bank account to see if there was enough cash to fund the move that he discovered his father-in-law had been (perfectly legally) borrowing money from the business.
I have no idea whether that is true or not, but as it has gained currency so people have started to speculate that a move to LA could see Ramsay quit the UK altogether and sell or vacate some or all of his British establishments. The sale of Murano and the impending exit from Claridge’s (could Marcus Wareing take it over?) inevitably added fuel to the fire while the delay to the opening of the Savoy Grill also fanned the flames.
Well, my understanding is that Ramsay has no intention of quitting the UK – at least as far as his business is concerned. The Savoy Grill is set to open at the end of the month and the word is that the chef is set to unveil the location of his first eaterie in partnership with his chums David and Victoria Beckham. So where do you think this landmark restaurant is going to be? Mayfair or Chelsea perhaps? Or maybe in Hoxton? Indeed not. I hear the site they have secured is in Southwark.
Bet on Leaver
Carl Leaver, a familiar figure in the leisure industry from his time at companies like Forte, Whitbread and De Vere, must have wondered whether he was ever going to land the top job his talents deserve.
It is 18 months since he announced he was quitting as international director of Marks & Spencer, and he has narrowly missed out on a number of high-profile chief executive posts, including easyJet and Whitbread. At one point he had looked like a shoo-in at Whitbread but it was to be easyJet’s Andy Harrison who was named as Alan Parker’s successor. But good things come to those who wait.
The 42-year-old will this week be named chief executive of Gala Coral, the gambling operator. Leaver may not have direct gambling industry experience, but his retail and leisure skills will come in handy as he seeks to put the group’s Gala casinos and bingo clubs on an even keel while pepping up its Coral betting shops. He will doubtless be keen to look closely at how Ian Burke at Rank has successfully restored the group to growth by focusing on basics like food and beverage, service and the physical environment.
