Loch Fyne Franchise Sparks Bid Talk

This Is Money:

The Loch Fyne restaurant company is close to signing a multi-million pound franchising deal with catering giant Sodexho, heightening speculation it will soon be snapped up by a big-fish venture capitalist for as much as £70m.

Although no sale process is under way yet, a takeover of the group - famed for oysters from the Scottish loch - is reckoned to be one of the most likely deals in the leisure sector this year, as it enjoys strong growth and ambitious opening plans.

As well as branching out into franchising for the first time, the company-is also about to open a small chain of fishmongers, adding an extra strand to the business. 2 sites are being planned in west London and a third has already been signed up in St Albans to test the concept outside the capital.

Venture capitalists Electra Investment Partners and ECI are interested in bidding if the company puts itself up for sale, while Cinven and Blackstone, who have both recently bought restaurant chains, are also viewed by analysts as likely bidders.

Cinven recently bought PizzaExpress owner Gondola and Blackstone has just bought Café Rouge group Tragus.

‘It’s a good, well-run business and restaurants are doing well at the moment, particularly in provincial towns,’ said one venture capitalist considering making an approach. Another said: ‘We like the brand and it has a good roll-out story.’