Pizza profits have been falling

Two private equity firms - Capricorn Ventures International (CVI), owner of the Nando's restaurant chain, and TDR Capital - have teamed up to make an offer worth 387p per share or �278m ($436m) for the group.

The offer trumps that of previous owner Luke Johnson who had already agreed a �263m, or 367p per share, bid for the chain.

Mr Johnson's vehicle Venice Bidder, which also involves the former Pizza Express chief executive Ian Eldridge, has now said it might raise its offer.

Booby prizes

Shares in Pizza Express leapt 10p, or 3%, to 389.5p on news of the renewed bid action.

Even at 387p, they're (CVI and TDR) still getting Pizza Express on the cheap David Liston, Gerrard

The restaurant group's chairman Nigel Colne said the company would go to whichever bidder came in highest.

"Price is the sole determinant in the choice of who will succeed in this business", Mr Colne told Reuters.

But the company will have to pay a sizeable 'break fee' to whichever bidder loses the battle.

If Venice Bidders is beaten, Pizza Express will pay them �2.63m, while Gondola Express stands to receive �2.78m if it loses.

Bargain deal?

In keeping with the Italian theme, the two private equity groups have formed a consortium called Gondola Express for their bid.

Gondola said its offer represented a 47% premium to Pizza Express's share price before the restaurant chain revealed in December that it had received a number of possible bid approaches.

But some analysts suggested Pizza Express was still worth more.

"Even at 387p, they're (CVI and TDR) still getting Pizza Express on the cheap," said David Liston, a fund manager at Gerrard.

Mr Liston suggested the restaurant chain was worth nearer 420p per share.

Leaner profits

Trading at Pizza Express has weakened in the past year amid intense competition and a slowdown in visitors to London.

The group revealed in February that profits had fallen 18% in the six months to 31 December with sales down by 5%.

Chairman Nigel Colne told the Reuters news agency that business had deteriorated further in recent weeks.