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Cinven ties up Gondola deal

9 Oct 2006

Cinven say that they have reached agreement on the terms of the recommended cash acquisition of Gondola. Under the proposal, Gondola shareholders will receive 415 pence in cash for each Gondola Share, valuing Gondola at approximately £559m. The proposed dividend of 4.7 pence per Gondola share announced on 21 September 2006 will now not be paid. Taken together with their net debt position as at 2 July 2006, the acquisition represents an enterprise value of approximately £900m.

The firm said it expected that the scheme document will be posted by the end of October 2006 and that the proposals will be put to Gondola shareholders at the court meeting and the EGM, which are expected to be held by the end of November 2006. Subject to the satisfaction of relevant conditions, it is then anticipated the scheme will become effective in December 2006.

Gondola is a restaurant operator, and the owner of the Pizza Express, Ask and Zizzi brands.

Commenting on the acquisition, Yagnish Chotai, a director of Cinven’s acquisition vehicle, Paternoster Acquisitions, said, ‘We are delighted that the independent directors of Gondola have decided to recommend unanimously Paternoster Acquisitions’ offer and we look forward to working with Gondola’s management and employees to continue to develop its business and brands through a focussed expansion programme.’

David Ross, the chairman of Gondola (and Carphone Warehouse co-founder), added, ‘After careful consideration and deliberation, the Independent Directors are unanimous in their recommendation that the shareholders should vote in favour of the Acquisition. Whilst we believe there to be significant long term potential in Gondola, Cinven’s offer allows shareholders the opportunity to realise their entire investment now at an attractive cash premium.’

Other investments by Cinven in this segment include Fitness First (exited in a sale to BC Partner), Odeon Cinemas (exited in a sale to WestLB and The Entertainment Group), William Hill (exited via an IPO) and Gala Coral (a current investment).

Cinven is a European PE house with offices in London, Frankfurt, Milan and Paris. Since 1977 Cinven have invested in transactions with a total value in excess of €60bn, while between 1996 and 2005, the firm returned €7bn to their investors. Their last fund closed in 2002 at €4.4bn, and is solely focused on European buy-outs.

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