Pizza Express shares fall as Osmond walks away from takeover talks

Pizza Express said it was "unable to accept the proposed terms" of the deal put forward by Osmond’s Twigway investment vehicle and all discussions have now collapsed.

But City investors said a string of financial bidders are likely to be keeping a close eye on the group and a new bid could emerge within the next few weeks.

Osmond ditched the bid move after a dispute over an inducement fee - money which would have been paid by Pizza Express to cover part of Twigway’s costs for examining the books.

Pizza Express claimed the fee was of an "unusually onerous nature".

Old Mutual leisure analyst Greg Feehely said: "It seems that Twigway wanted Pizza Express to pay for all their due diligence expenses, which does seem just a little bit unreasonable."

Shares in the group lost 45.5p in yesterday’s trade to close at 303.5p. The stock, which has been pummelled by two profit warnings this year, stood at over 920p in January.

Osmond’s collapsed bid, which was backed by private equity group Capricorn - a shareholder in the Nando’s restaurant chain - valued Pizza Express at 330p to 350p per share.

Feehely added: "The price they are offering looks very opportunistic, even at the upper end of the range. But every set of figures we get from Pizza Express shows like-for-like sales are down. "Until they can draw a line in the sand and prove they have turned things around, any bid they receive will be opportunistic."

Osmond was part of the team that brought Pizza Express to the market nine years ago. He shared a 26 million fortune with his business partner, Luke Johnson, on the back of the flotation.

Osmond used his cash pile to set up Punch Taverns, through the acquisition of 845 pubs from Japanese financial giant Nomura.

Weekend speculation linked Johnson to a rival bid for Pizza Express through City firm Hawkpoint Partners.

A spokeswoman for Pizza Express said there had been no further approaches for the group and the board planned to plough ahead with its recovery plan.

But it is understood that a string of potential financial buyers are weighing up their bid options.

The 300-strong chain has no debt, pays around 9 million annually in dividends, and is investing around 25 million per year on expanding its chain and upgrading some of its existing outlets.

RESTAURANT group Chez Gerard said it opened its books this week to Paramount, the shell company which tabled a 100p per share bid last month.

Addressing shareholders at its annual general meeting, Chez Gerard also said trading has remained "depressed" since the end of its financial year.

It added that there is "no certainty" the bid will go ahead.