Mystery investor 'Kintoro' stalks Belgo
Belgo, the restaurant group, has confirmed a mystery investor has bought up a 14 per cent stake in the company, raising speculation of a bid.
A spokesman for the firm told thePublican.com the rumours circulating in the national press were true: "We still do not know the identity of the stakeholder - we are still trying to find out. All we know is they are operating under the name of Kintoro International."
Kintoro is the name of the hero of a Japanese folk tale.
The name appeared on Belgo's share register on Friday after it bought most of the shares sold last week by institutional investors Zurich Financial Services and Edinburgh Small Companies Trust.
Talk of potential bid activity has engulfed Belgo in recent weeks. Many industry insiders have said it is only a matter of time before the company is the subject of a takeover. The weakened share-price makes the company vulnerable to a hostile takeover bid, and with a mystery investor holding such a large stake, this would be the obvious conclusion.
The alternative theory is that an institutional investor is simply looking to profit through buying at the bottom of the market.
The group, which was founded by Luke Johnson and owns top London eateries Le Caprice and The Ivy, recently reported a big swing into the red. Last year it made a pre-tax loss of £1.4m compared to profits of £4.1m the year before. A one-off payment of £1.2m was made to try to expand the Belgo brand to New York, and £3.7m was spent on assets.
The group currently has debts of £6m.
Its core business, Belgo Bierodrome, the beer and mussels restaurant chain, has experienced lacklustre trading. Foot-and-mouth disease, the strong pound and the Wall Street slump has not helped the group's cause. The failed foray into New York, before the terrorist attacks of September 11, has compounded existing problems.
Strada, its wood-fired pizza restaurant chain, is performing well, however. The company's expansion will be focused on Strada outlets, which are cheaper to set up than some of the group's other businesses.
Belgo is changing its name to Signature Restaurants to better emphasise the diversity of the group, and is planning a one-for-20 share consolidation. Its shares, which reached a high of 12p in 1998, are currently 2.25p, valuing the group at £23m. Related stories:
New name for Belgo in shift towards restaurant business (26 September 2001)
