Patisserie Valerie hoping to gobble up Gail's through new share issue

by

Serial entrepreneur Luke Johnson backs both businesses (Source: Getty)

Patisserie Valerie is planning to launch a share issue as part of plans to buy out artisan baker and cafe chain Gail's.

According to Sky News, the Aim-listed chain is drawing up plans to raise about £35m towards the cost of a deal. With a market cap of just over £350m, Patisserie Valerie could organise the placing without giving existing shareholders the right to pre-empt it.

A deal is not likely to be agreed until March.

Entrepreneur Luke Johnson is executive chairman of Patisserie Valerie, and also owns Gail's parent, Bread Holdings, but Sky's sources said he would not be involved because of the potential to create a conflict of interests.

Johnson, who oversaw the expansion of Pizza Express and has owned other restaurants including Strada, owns 39 per cent of Patisserie Holdings. He recently told City A.M. that the firm was hungry for acquisitions, after revealing it had accumulated £21m of cash on its balance sheet after a strong financial year

No one from the firm was available for comment.