A former owner of Little Chef is among a pack of bidders plotting a cut-price takeover of Byron, the gourmet burger chain caught in the headwinds afflicting Britain’s casual dining sector.
Sky News understands that R Capital, which specialises in buying troubled businesses, is one of several suitors to have held talks with Byron’s owners and management in recent weeks.
News of the interest from R Capital, which sold Little Chef in 2013, comes a month after Byron’s investors hired KPMG to evaluate options for their ownership of the company.
Sources said this weekend that some prospective bidders were proposing to pay as little as £25m for the burger chain.
That would be a far cry from the £100m price tag attached to Byron when it last changed hands and underlines the challenges facing any new owners.
Potential bidders had indicated “a wide range of valuations for Byron”, a source insisted on Sunday.
Byron has been owned by Hutton Collins, an investment firm, for four years and employs 1,800 people.
It closed four under-performing stores earlier this year.
Insiders pointed out that the company had not breached its banking covenants, contrary to market rumours, and was not considering a company voluntary arrangement, a process which enables property-owners to close loss-making outlets more cheaply.
Information distributed to potential bidders does, however, indicate that 13 of its sites are loss-making or marginal, and fall into a category entitled ‘exit immediately’.
A further dozen restaurants are marked for review and could be exited by a new owner “with or without a premium”, according to Byron.
The company trades from just over 70 sites across the UK, having opened its first restaurant in 2007.
It changed hands for £100m in 2013, when it operated from just over 30 sites.
Its highest-profile customer was George Osborne, who as the Chancellor attracted ridicule when he posted a picture of himself on social media eating a Byron burger during preparations for a Government spending review in 2013.
The chain has seen a downturn in trading performance in recent months amid broader pressure on the restaurant sector amid greater competition from high street and delivery-based rivals.
During the summer, Handmade Burger Co collapsed into administration, while companies including The Restaurant Group – which owns Garfunkel’s and Frankie & Benny’s – have been forced to change their leadership teams in an effort to revive their fortunes.
Byron named Simon Cope, a former Wagamama executive, as its new chief executive in September, working alongside chairman Dalton Philips, the former boss of Wm Morrison.
A source close to Byron insisted that it remained focused on growth, with a new restaurant expected to open in Bath next year.
Byron declined to comment, while R Capital could not be reached.
Source: Sky News