Affected market: Restaurants
No. ME1646-04
Please note that the full text of the decision can be downloaded by using the link on the right. What follows are extracts regarding the parties, the transaction, jurisdiction, assessment, and decision.
The OFT's decision on reference under section 33 given on 14 April 2004.
PARTIES
Riposte Limited (Riposte) is a limited liability company recently formed for the purpose of making the offer for ASK Central plc (ASK). It is ultimately owned and controlled by PandoraExpress LP, in which both TDR Capital LLP (TDRC) and Capricorn Ventures International (CVI) are investors. TDRC and CVI own and control GondolaExpress which acquired PizzaExpress in 2003. PizzaExpress includes the following brands: Pizza Express, Café Pasta/Marzano, Gourmet Pizza, Kettners and Riviera. CVI also owns the Nando's brand. In 2003, PizzaExpress had a turnover of £217 million in the UK, while Nando's had a turnover of £53 million in the UK.
ASK operates a number of restaurant chains across the UK, including the following brands: ASK, Zizzi, Jo Schmo, De:Alto and Nimmo's. ASK's UK turnover for the year ended 29 December 2002 was £95.8 million.
TRANSACTION
Riposte is offering £212 million for ASK, to be paid to shareholders in cash at 220p per share. The parties notified the transaction by way of a merger notice on 1 March 2004. The extended statutory deadline is 15 April 2004.
JURISDICTION
As a result of this transaction Riposte and ASK will cease to be distinct. The UK turnover of ASK exceeds £70 million, so the turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act) is satisfied. The OFT therefore believes that it is or may be the case that a relevant merger situation will be created.
ASSESSMENT
The parties overlap in the ownership and operation of restaurants, and their brands compete to varying degrees with each other as well as with other types of restaurants. At a national level, the restaurant sector is highly fragmented. At a local level, there are no towns where the parties' combined share of supply by number of outlets exceeds 25 per cent. Barriers to entry do not appear to be significant, as evidenced by frequent entry and exit in the restaurant sector.
Consequently, the OFT does not believe that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.
DECISION
This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.
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