Paying a price, proving a point

At certain points last week it felt as if La Tasca was merely a subplot in a bigger battle between Robert Tchenguiz, Blackstone and the City. It was a watershed moment for Tchenguiz – not just a hotly-contested auction for a listed restaurant group, but a battle for reputation and credibility. After being slighted by the La Tasca board in favour of a lower bid from Tragus Holdings, its bigger rival that is owned by Blackstone, the Iranian entrepreneur had a point to prove. For despite a burgeoning property and retail portfolio, and more than a handful of successfully executed deals, Tchenguiz seems to have an issue persuading vendors to back him over rival bidding consortia. Rightly or wrongly, it seems the City does not like dealing with this perceived outsider, for fear that he will drag his heels and chip at the price. Maybe it is of his own doing and Tchenguiz has reneged over price once too often? In December 2005, he lost the £2.7bn auction for Spirit Group – one of the biggest pub deals ever – to Giles Thorley’s Punch Taverns, despite having tabled a higher bid. But, as we wrote last week, beware a billionaire scorned. When La Tasca’s board backed Blackstone’s 185p per share, Tchenguiz’s R20 effectively went hostile with a better bid. And when Blackstone hit back with a higher offer, R20 countered again with a knockout 200p per share deal, valuing the business at about £124m, including debt. Blackstone was forced to concede defeat. At £124m, Tchenguiz is paying a very full price, although it felt as if the proprietor of Laurel Pub Company was prepared to pay whatever it took. Because despite the pervading sense that the property magnate was out to prove a point, the strategic importance of La Tasca to Laurel should not be under-estimated. The casual-dining group, which comprises La Vina and Sam & Maxies alongside its eponymous brand, adds considerable weight to Laurel’s “food bar” business, which includes formats such as Ha Ha Bar & Canteen, Santa Fe and Slug & Lettuce. The acquisition offers three more possible solutions to Laurel sites that are performing poorly, especially those trading under the Litten Tree and Yates formats, many of which Laurel tried to off-load unsuccessfully last year. Finally, and this could be the rub, it potentially allows Tchenguiz to refinance the whole Laurel Food division on considerably more favourable terms ie with more debt. La Tasca will help create a real sense that this is a restaurant business, and therefore should attract a restaurant rating. This deal is also the clearest sign yet of a blurring of the boundaries between the restaurant world and the pub and bar world. It would be no surprise to see more transactions between groups that originate respectively from the drinking and eating-out markets.