A City analyst has predicted that the management of Prezzo could look again at a potential buyout of the Italian restaurant operator.
Nick Batram at KBC Peel Hunt said shares in the chain were one of the cheapest looking stocks in the sector - although this did not reflect the quality of the business or the management.
He added: “It is true that trading is tough and 2010 is likely to see another decline in profits. However, the balance sheet is robust, with net cash and freehold assets.
“If the rating stays where it is and credit markets improve, it is hard to see management not being tempted to take another look at taking the group private.”
The management team, led by Jonathan Kaye, chief executive, investigated taking the business private two years ago.
John Lederer, the managing director of Blanc Brasseries and a non-executive at Prezzo, was appointed to chair a committee to represent the interests of independent shareholders, and assess offers.
However such discussions faltered in October 2008 due to the conditions of the then banking market.
Batram added: “At 6.5x 2010E EV/EBITDA the equity value would be worth around 47p. This would cost management around £38m to buy out the minority or just £9m net of cash and freeholds.”
