LONDON -- Shareholders of PizzaExpress are calling for the group's chairman, Nigel Colne, to resign because he recommended the company accept a £263 million (U.S. $424 million) offer for the company from former chairman Luke Johnson and ABN Amro Capital.
The offer is viewed as potentially too low in light of a rumored higher offer to come from TDR Capital and Capricorn Ventures International, the main investor in the Nando's restaurant chain.
Additionally, should PizzaExpress accept the TDR-Capricorn offer, PizzaExpress must pay a £2.6 million (U.S. $4.2 million) break fee to the Johnson-led consortium.
According to the Independent, in a letter to the board's chief executive, David Page, Jeremy Utton from Analyst Investment Management, which has a stake of nearly 3 percent, called for "urgent action," including the appointment of a new "heavyweight chairman."
Utton, along with other shareholders such as Fidelity, which has a stake of more than 9 percent, is upset at the decision by the independent directors, headed by Colne, to back a 367 pence-per-share (U.S. $5.92) offer for the beleaguered company. Institutional investors representing more than 20 percent of the stock are understood to have put pressure on the board to withdraw its recommendation and consider alternative proposals.
* In related news, the UK's Takeover Panel, which regulates the conduct of mergers and acquisitions, has contacted the major players in the battle for PizzaExpress to ask them to stop leaking information.
According to the Telegraph, the Takeover Panel said last night that it doesn't comment on individual cases. A spokesman for the TDR and Capricorn consortium declined to comment on the possibility of a meeting. "Our position is unchanged," he said. "We said we were interested in possibly making an offer and we still are."