The Stock Exchange is investigating a sharp rise in the shares of My Kinda Town before the London-based theme restaurant chain revealed a fresh bid approach on Friday. The announcement, forced by intervention of the Takeover Panel, followed a leap of over 10 per cent in the shares, by 16p to 163.5p, the previous day.
The company declined to identify the mystery suitor, but City speculation immediately centred on Rank or Baldwin, a small quoted holidays, printing and leisure group keen to expand its restaurants and bars operation.Rank, which recently bought the Tom Cobleigh pubs group, immediately denied an approach, as did Whitbread, which has led consolidation in the sector, snapping up Pelican and Costa Coffee.Chez Gerard, which held talks with My Kinda Town a year ago, also denied a renewed bid. Consob noted that former Olivetti chairman Carlo De Benedetti sold stock in the company during this period.Troubles at Olivetti escalated after its first-half figures in September, when it posted a pre-tax loss of L440.2bn.. Olivetti shares have fallen from over L1,000 (41p) in April to an all-time low of L435.An Olivetti spokesman said: “We are doing all we can for shareholders. It would be nice if shareholders could give us a break and leave the board to get on with sorting out the problems.”Enzo Berlanda, president of bourse authority Consob, is understood to have handed a report to Turin’s public prosecutor concerning Olivetti’s share movements between the end of August and the beginning of September, before the company’s first-half results. Its future is seen as limited by analysts in comparison to the high growth potential of Omnitel.UK institutions were believed to have owned up to 15 per cent of Olivetti, following a rescue rights issue by the company last December – even though Italian banks and investors were quietly selling off their holdings in the company at the time.ING Barings sat on a 6 per cent stake – at one point it was believed to own as much as 8 per cent of the company.

Selling a share of value to sustain an investment soaking up money like Infrastrada [is wrong].” Olivetti would still be left with a majority stake in Omnitel.Mr Pignatelli was infuriated by the prospect of another rights issue, which he dubbed a “terrifying hypothesis.”Infrastrada is the fixed-line telephone company in which Olivetti has a large stake. Mark Pignatelli, who runs European investments for the fund manager, was one of several London institutions who supported Olivetti after the company raised pounds 913m in a rescue rights issue last December.
Last week, he told a standing committee of the Italian parliament that “selling off Omnitel would be a mistake. Porterbrook, its rolling stock leasing company, will also be aiming to expand on the continent.. One of Olivetti’s largest shareholders, ING Barings Asset Management, has slated the company’s decision to sell an 8 per cent stake in Omnitel, its mobile phones subsidiary, to raise money to reduce crippling debts. “The first thing that strikes you about northern European railways is that they’re part of the fabric of the community,” said Mr Eccles.Stagecoach will also hope to profit from privatised European lines that go to other operators.

However, Mr Eccles figures that by then any advantage British companies have from being the first to privatise will have evaporated.Other privatised descendants of British Rail – particularly South Coast Railways, which is owned by France’s Compagnie Generale des Eaux – are expected to get involved in the next great railway boom. But the giant American railroad companies, which are currently tied up in a series of consolidation battles, are also likely to be bidding.Virginia based CSX – which faces a challenge from Norfolk Southern for its agreed $8.4bn (pounds 5.4bn) takeover of Conrail – already has a joint venture, NDX Intermodal, with the German and Dutch state railways.The state of the European market varies greatly from country to country, with some sporting flashy rolling stock and strong infrastructure – such as France’s TGV high-speed trains – while others are more dilapidated.Holland scores particularly high on the trainspotters cards because of its high passenger loads. Its turnover of pounds 350m last year indicates it will account for a third of the group’s total sales.”The value companies like Stagecoach can add is that we’re used to taking state monopolies and shaking them up. We would focus on the bottom line.”Attention will focus on European railways once the British franchising of rail lines is complete in the middle of next year. “There’s no doubt we will turn our attention to Europe,” said Graham Eccles, Stagecoach’s rail business manager. “We’re doing a lot of paper research.”
Stagecoach already has a significant presence in the continental bus market, with a small company in Portugal and the continent’s largest carrier, Swedbus. The Perth-based company, which already owns South West Trains and the Island Line on the Isle of Wight, sees international expansion – especially on the continent – as the key to future growth.