Activist fund Elliott weighs stake in Café Rouge owner
Private equity groups circle after Casual Dining Group enters administration
The activist hedge fund Elliott Advisors is considering a bid for the struggling UK restaurant company Casual Dining Group, which announced that it was entering administration last week.
Elliott, which owns stakes in the UK bookshop chain Waterstones and the French drinks company Pernod Ricard, has expressed an interest in buying Casual Dining Group as it seeks to pick up distressed assets as a result of the pandemic.
It is among a number of investors interested in the business but has yet to table a formal bid, according to a source with knowledge of the discussions.
Last week, Casual Dining Group, which owns the Bella Italia and Café Rouge brands, announced that it was filing for administration, resulting in the immediate closure of 91 sites and the loss of 1,900 of its 6,000 staff.
Other private equity firms including the turnround specialists Endless and Aurelius Group, which tried to buy Jamie’s Italian after it collapsed in 2018, are looking at buying parts of the business.
Elliott’s interest was first reported by Sky News.
Several mid-market restaurant businesses, struggling with hefty debt loads after a private equity fuelled boom in the sector through the mid-2010s, have appointed advisers or put themselves up for sale in recent weeks as they battle to survive the pandemic.
Byron, the burger chain, announced that it was lining up administrators as it entered talks for a rescue deal last week, while the Italian restaurant business Prezzo is preparing to launch a sale process either this week or next.
The private equity firm TowerBrook is “in the driving seat” to buy Azzurri Group, the owner of Ask and Zizzi, with a deal likely to be confirmed in the coming days, a source close to that business said.
Many restaurant groups were able in England this weekend to open their doors to dine-in customers for the first time in three months, but data from the research firm Springboard showed that although footfall on high streets increased by about 36 per cent after 5pm on Saturday on a week-on-week basis, it was still less than half of 2019 levels.
Restaurateurs have warned that trading is unlikely to return to pre-Covid-19 levels until well into 2021 due to social distancing measures and consumers’ anxieties around going out.
Casual Dining Group said last week that it had received “multiple offers” for the business but that all of them “envisage a reduced restaurant estate”.
Elliott Advisors, the UK unit of US fund Elliott Management, and Casual Dining Group declined to comment further on the sale process.