There may be more yet to eatery deals feeding frenzy

History may be repeating itself, say analysts Wayne Brown and Greg Feehely at Altium Securities.

They point to 2002-3 when "a slew of restaurant companies were taken private for what would later become clear were low valuations".

Quoted restaurant chains' "balance sheets are generally strong, dividends on the whole appear secure and long-term growth drivers remain in tact", they add.

After bad weather at the start of the year and the disruption caused by the World Cup, restaurant and pub chains are reporting a gradual improvement in sales. At the same time, owners with proven brands that work are again looking to grow their estates.

Brown and Feehely say: "It is not surprising to see the return of M&A activity as bidders take advantage of current unchallenging valuations which are not likely to persist for long."

Carluccio's and Clapham House have now received bids. The other potential targets include:
Individual Restaurant Company — two main brands Piccolino and Restaurant Bar & Grill, 33 outlets, market value £7.2 million. Shares unchanged today.

Prezzo — mostly under the Prezzo brand of pizza, pasta and Italian grills, 145 outlets, market value £133 million. Shares up 7% today.

The Restaurant Group — six brands including Frankie & Benny's, Chiquito and Garfunkel's, runs 375 outlets, market value £527 million. Shares up 1.4% today.