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Takeover buzz sends PizzaExpress shares chugging upward

February 11, 2003

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LONDON -- Though its same-store sales continue to lose steam, shares of PizzaExpress chugged higher on the FTSE on Feb. 11 as talk of a management buyout increased.

According to the Financial Times, PizzaExpress chairman Nigel Colne, who heads the team of non-executive directors considering three separate buyout offers, called current negotiations "well advanced" and said he hoped to give more information to shareholders soon.

Potential buyers include the chain's current management team, led by David Page, the 311-store chain's chief executive. The management team would be funded by PAI, a French private equity group.

PizzaExpress' shares closed at 316-1/2p (U.S. $5.12), up 13p (U.S. 21 cents) but still below the 330p to 350p (U.S. $5.34 to $5.67) range offered by Hugh Osmond, a former co-owner of the chain, who abandoned his own buyout effort last November.

PizzaExpress revealed this week that for the first half of its current fiscal year, which ended Dec. 28, comparable-store sales dropped 4.8 percent on sales of £103.8 million.

The chain's operating margins narrowed by 3 percent to 17 percent during the period, which Page attributed to increases in store rents, minimum wage and insurance costs.

See related stories:
* PizzaExpress still plagued by tourism declines
* PizzaExpress reports sales decline, stock falls
* Twigway withdraws offer to buy PizzaExpress