Takeovers as dining-out sector starts shift to sitting at same table

Pubs and restaurants group Mitchells & Butlers has agreed to buy Ha Ha for 19.5m while Nando's has made a recommended 30m offer for Clapham House, owner of Gourmet Burger Kitchen and the Real Greek.

The majority of the 22 Ha Has will be converted into All Bar Ones or Browns restaurants, including the three in Leeds, Sheffield and York.

Ha Ha's is being sold by Bay Restaurant Group, which also own tapas restaurant chain La Tasca.

While M&B will axe the Ha Ha name, it said it plans to take on all retail and operational staff employed in the sites being bought.

Bay Restaurant said the deal would allow it to focus solely on Spanish tapas group La Tasca, following its move in February to offload the Slug & Lettuce business to the Town & City Pub Company.

Ian Payne, chairman of Bay Restaurant, said: "The sale of Ha Ha follows a successful and active auction process, which we launched in April of this year.

"As anticipated, there was significant interest in the Ha Ha brand portfolio and I am delighted to see both the business and all of its employees going to such a good home."

Ha Ha, launched in 1999, employs around 800 people.

The sites will allow M&B to further concentrate on the food-led market as part of a strategy to move away from pure drinks pubs, which have suffered since the smoking ban and the recession.

M&B chief executive Adam Fowle said: "Whilst small, this acquisition illustrates our ability and our strategy to develop sites to create value for Mitchells & Butlers shareholders. It will also provide an excellent opportunity to grow significantly two strong brands, All Bar One and Browns."

M&B, which also owns Toby Carvery, recently announced the sale of more than 300 sites and a 39m deal to offload the Hollywood Bowl ten-pin bowling business.

The Ha Ha sale highlights the consolidation taking place in the casual dining sector.

Yesterday Clapham House, which owns the Gourmet Burger Kitchen and the Real Greek restaurant chains, agreed to be bought by Nando's peri-peri chicken chain in a deal valuing it at 30.4m.

The British unit of South Africa's Nando's, owned by private-equity firm Capricorn Ventures International, said it had made a cash offer of 74p a share, an eight per cent premium to the stock's closing price on Thursday.

Clapham House, which is 27 per cent owned by Capricorn Ventures, has 73 restaurants across its two brands, 59 across the UK and 15 internationally.

Of these it has 53 Gourmet Burger Kitchens in the UK including two sites in Leeds and York. It also has six Real Greeks in London.

Clapham House's directors, who were advised by Altium, said they considered the terms of the offer to be "fair and reasonable".

Nando's said that in an increasingly competitive market, significant investment and time were needed to re-invigorate Clapham House's restaurants.

Capricorn Ventures has received support from a further 10.7 per cent of Clapham House's shareholders.

Seymour Pierce analyst Hugh-Guy Lorriman said: "Considering our cautious view on the sector and in particular on the, relatively speaking, lower-margin operators, we think the offer represents reasonable value.".

But Nick Batram of KBC Peel Hunt said the deal was disappointing for Clapham House's shareholders.

Nando's has 234 restaurants and employs 6,500 staff in the UK and Ireland.

Clapham House, which revealed in July it was in talks with a bidder, said it faced "uncertainty" because of the VAT hike in the new year and the worrying consumer outlook.

It is thought Clapham House hoped for a "white knight" rival bidder to emerge, but efforts were reportedly blocked by Nando's 27 per cent stake.

M&B 0NE OF BIGGEST OPERATORS IN MARKET

Mitchells & Butlers serves 125 million meals and 450 million drinks each year and is one of the largest operators within the UK's 70bn eating and drinking out market.

Its portfolio of brands includes Harvester, Toby Carvery, Vintage Inns, Premium Country Dining Group, Crown Carveries, Sizzling Pub Co., Browns, Miller & Carter, Metro Professionals, All Bar One, Nicholson's and O'Neill's.

Nando's was launched in South Africa in 1987 by friends Robert Brozin and Fernando Duarte and opened its first UK restaurant in 1992 in Ealing, west London.

The group has restaurants in around 30 countries and is famed for its peri-peri chicken made with chilli sauce and fast-food value prices.

Clapham House – headed by chairman and former Pizza Express boss David Page and chief executive Paul Campbell – listed in November 2003 with the aim of buying up brands.

It acquired traditional Greek cooking chain The Real Greek in December 2003 and Gourmet Burger Kitchen in November 2004.