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Giardino Group PLC (GDO)

  Print      Mail a friend       Annual reports

Friday 19 December, 2003

Giardino Group PLC

Offer for Giardino Group PLC

Giardino Group PLC
19 December 2003


Not for release, publication or distribution in whole or in part in or into the
United States, Canada, Australia, Japan or Ireland.


For immediate release                                    19 December 2003



                             Recommended Cash Offer


                                       by


                       BDO Stoy Hayward Corporate Finance


                                  on behalf of


                        Town Centre Restaurants Limited


         to acquire the entire issued and to be issued share capital of


                               Giardino Group PLC


Summary


•         The Independent Directors of Giardino and the board of Town Centre
Restaurants (currently comprising Mark Winter and Ron Sutcliffe) announce that
they have agreed the terms of a recommended cash offer, to be made by BDO Stoy
Hayward Corporate Finance on behalf of Town Centre Restaurants, for the whole of
the issued and to be issued share capital of Giardino.


•         Town Centre Restaurants is a newly incorporated company which has been
formed for the purpose of making the Offer. Town Centre Restaurants is backed by
the Giardino management team led by Mark Winter and Ron Sutcliffe, the Town
Centre Restaurants EBT and Bank of Scotland Corporate Banking, a division of
HBOS plc, through its Integrated Finance team.


•         The Offer will be made on the basis of 80p in cash for each Giardino
Share, valuing the entire issued share capital of Giardino at approximately
£16.3 million.


•         The Offer price of 80p per Giardino Share represents a premium of
approximately 15.1 per cent. over the closing middle-market price of 69.5p per
Giardino Share on 19 December 2003 (the last dealing day prior to the
announcement of the Offer) and a premium of 23.1 per cent. over the closing
middle-market price of 65p per Giardino Share on 29 September 2003 (the last
dealing day prior to the announcement that Giardino had received an approach
which might or might not lead to an offer being made for Giardino).


•         As an alternative to all of the cash consideration to which they would
otherwise be entitled under the Offer, Town Centre Restaurants is offering
Giardino Shareholders (other than US persons and certain other overseas Giardino
Shareholders) who validly accept the Offer, the opportunity to elect to receive
the Alternative Offer (comprising Unsecured Loan Notes, Preference Shares and
cash).


•         Town Centre Restaurants has received irrevocable undertakings to
accept the Offer and, pursuant to the Share Exchange Agreement, undertakings to
sell Giardino Shares, representing approximately 78.4 per cent. of Giardino's
share capital.


•         The Independent Directors of Giardino unanimously recommend the Offer.


This summary should be read in conjunction with the full text of the following
announcement. Certain terms used in this summary are defined in Appendix II of
the following announcement.


For further information contact:


Town Centre Restaurants Limited 020 8443 3968

Mark Winter, Chief Executive Officer

Ron Sutcliffe, Finance Director


BDO Stoy Hayward Corporate Finance        020 7486 5888

Alex White, Partner

Shaun Claydon, Assistant Director


Giardino Group PLC 01428 681 905

John Moxon, Chairman


Evolution Beeson Gregory 020 7071 4300

Tom Price, Director

Tim Redfern, Associate Director


Bank of Scotland Corporate Banking         0131 2435572

Mark Elliott, Head of Communications


This announcement has been approved for the purposes of Section 21 of the
Financial Services and Markets Act 2000 by BDO Stoy Hayward Corporate Finance.


BDO Stoy Hayward Corporate Finance, a division of BDO Stoy Hayward, Chartered
Accountants, which is authorised and regulated in the UK by the Financial
Services Authority, is acting for Town Centre Restaurants and no one else in
connection with the Offer and will not be responsible to anyone other than Town
Centre Restaurants for providing the protections afforded to customers of BDO
Stoy Hayward Corporate Finance nor for providing advice in relation to the
Offer.


Evolution Beeson Gregory, which is authorised and regulated in the UK by the
Financial Services Authority, is acting exclusively for Giardino, acting through
its Independent Directors, and no one else in connection with the Offer and is
not acting for any other person and will not be responsible to anyone other than
Giardino for providing the protections afforded to customers of Evolution Beeson
Gregory nor for providing advice in relation to the Offer.


The Offer will not be made, directly or indirectly, and this document should not
be sent, in or into the United States, Canada, Australia, Japan or Ireland or
any other jurisdiction if to do so would constitute a violation of the relevant
laws of such jurisdiction The provisions referred to in this paragraph may be
waived by Town Centre Restaurants in its sole discretion as regards specific
Giardino Shareholders or generally.


The Unsecured Loan Notes and Preference Shares have not been, nor will they be,
registered under the United States Securities Act of 1933 (as amended) (the
'Securities Act') nor under the securities laws of any state or other
jurisdiction of the United States nor have clearances been, nor will they be,
obtained from the securities commission or similar authority of any province or
territory of Canada. Further, no prospectus in relation to the Unsecured Loan
Notes and Preference Shares has been, or will be, lodged with or registered by
the Australian Securities and Investments Commission nor have any steps been
taken to enable the Unsecured Loan Notes and Preference Shares to be offered in
Japan or Ireland in compliance with applicable securities laws of Japan or
Ireland. Accordingly, (except in transactions exempt from or not subject to the
registration requirements of the Securities Act, or the relevant securities laws
of Canada, Australia, Japan or Ireland) the Unsecured Loan Notes and Preference
Shares may not be offered, sold, resold, transferred, delivered or distributed,
directly or indirectly, in or into the United States, Canada, Australia, Japan
or Ireland or any other jurisdiction in which an offer of the Unsecured Loan
Notes and/or the Preference Shares would constitute a violation of relevant
security laws or require registration of the Unsecured Loan Notes and/or the
Preference Shares or to, or for the account of, a US person, or persons in, or
resident in, the United States, Canada, Australia, Japan, Ireland or any other
such jurisdiction.


The directors of Town Centre Restaurants Limited accept responsibility for the
information contained in the announcement other than that relating to the
expressions of opinion and recommendation of the Offer by the Independent
Directors.


The Independent Directors accept responsibility for their expressions of opinion
and the recommendation of the Offer.


Not for release, publication or distribution in whole or in part in or into the
United States, Canada, Australia, Japan or Ireland.


For immediate release                          19 December 2003



                             Recommended Cash Offer


                                       by


                       BDO Stoy Hayward Corporate Finance


                                  on behalf of


                        Town Centre Restaurants Limited


         to acquire the entire issued and to be issued share capital of


                               Giardino Group PLC


1.                Introduction

The Independent Directors of Giardino and the board of Town Centre Restaurants
(currently comprising Mark Winter and Ron Sutcliffe) are pleased to announce
that agreement has been reached on the terms of a recommended cash offer, to be
made by BDO Stoy Hayward Corporate Finance on behalf of Town Centre Restaurants,
to acquire the whole of the issued and to be issued ordinary share capital of
Giardino for 80p in cash for each Giardino Share. The Offer values the whole of
the existing ordinary share capital of Giardino at approximately £16.3 million.


Town Centre Restaurants is a private limited liability company recently
incorporated in England and Wales which was formed for the purpose of making the
Offer and has not traded. Following the Offer becoming or being declared
unconditional in all respects, Town Centre Restaurants will be owned by the
Investors and Uberior, a wholly owned subsidiary of Bank of Scotland.


In view of the involvement of certain Directors of Giardino in Town Centre
Restaurants, the Independent Directors, being John Moxon, David Leveton and
Franco Gasparelli (who will not have any continuing involvement in the
management of the Giardino Group if the Offer is successful), have taken
responsibility for considering the Offer on behalf of Giardino and, together
with advice from Evolution Beeson Gregory on the terms to be set out in the
Offer Document, for reaching conclusions on the appropriate recommendation to
Giardino Shareholders.


2.             Terms of the Offer

The Offer will be subject to the terms and conditions set out or referred to in
Appendix I to this announcement and the further terms and conditions to be set
out in the Offer Document and the Form of Acceptance.


(a)     The Offer

The Offer is being made on the following basis:


    for each Giardino Share                                      80p in cash


The Offer values the entire issued share capital of Giardino at approximately
£16.3 million.


The Offer price of 80p per Giardino Share represents a premium of approximately
15.1 per cent over the Closing Price of 69.5p per Giardino Share on 19 December
2003 (the last dealing day prior to the announcement of the Offer) and a premium
of 23.1 per cent. over the Closing Price of 65p per Giardino Share on 29
September 2003 (the last dealing date prior to the announcement that Giardino
had received an approach which might or might not lead to an offer being made
for the Company). The Offer also represents a premium of 34.4 per cent. over the
Closing Price of 59.5p per Giardino Share on the 30th dealing day prior to the
announcement that Giardino had received an approach which might or might not
lead to an offer being made for the Company.

(b)     The Alternative Offer

As an alternative to all of the cash consideration to which they would otherwise
be entitled under the Offer, accepting Giardino Shareholders (other than US
persons and certain other overseas Giardino Shareholders) may elect to receive
the Alternative Offer comprising:

 for each Giardino Share     60.5p in cash
                             9.5p of 1p nominal value Unsecured Loan Notes
                             15.0p of 1p nominal value Preference Shares

in each case subject to the terms and conditions of the Alternative Offer.
Elections to accept the Alternative Offer may only be made in lieu of all (but
not part) of the cash consideration to which a Giardino Shareholder would
otherwise be entitled under the Offer.


BDO Stoy Hayward Corporate Finance has advised Town Centre Restaurants that,
based on current market conditions on 19 December 2003 (the latest practicable
date prior to the announcement of the Offer), in their opinion, the value of the
Unsecured Loan Notes and Preference Shares if they had been in issue on that
date, would have been approximately 83.0p and 23.5p respectively per £1 nominal
value. Accordingly, the values of the various components of the Alternative
Offer if they were in issue on 19 December 2003 would have been as follows:

                                         Nominal value           Value (p) at 19
                                                 (p)             December 2003

Unsecured Loan Note                              9.5                       7.9
Preference Share                                15.0                       3.5
Cash                                            60.5                      60.5

                         Total                  85.0                      71.9


The Alternative Offer is conditional only on the Offer becoming or being
declared unconditional in all respects by 3:00pm on 13 January 2004 or (subject
to the City Code) such later date(s) and/or time(s) as Town Centre Restaurants
may agree with BDO Stoy Hayward Corporate Finance. The Alternative Offer will,
unless previously closed, remain open for acceptance until 3.00pm on the date
falling 14 days after the Offer becomes or is declared unconditional as to
acceptances. However, the right is reserved to keep the Alternative Offer open
for acceptance after such time and date. The right is also reserved to close the
Alternative Offer without prior notice on any closing date on which the Offer is
neither unconditional as to acceptances nor capable of being declared to be
unconditional as to acceptances and to reintroduce the Alternative Offer at any
time. If, on any closing date on which the Offer is capable of being declared
unconditional as to acceptances, the Offer is not so declared and is extended,
the Alternative Offer will remain open for at least 14 days after such closing
date (provided that if the Offer becomes or is declared unconditional as to
acceptances within 14 days after such closing date, the Alternative Offer will
remain open for at least 14 days after becoming or being declared unconditional
as to acceptances), but may then be closed without prior notice. If the
Alternative Offer closes, Town Centre Restaurants reserves the right to
reintroduce the Alternative Offer subject to the City Code.


The Independent Directors make no recommendation to Giardino Shareholders as to
whether or not to elect for the Alternative Offer. Shareholders who are in any
doubt as to whether or not to elect for the Alternative Offer should consult
their stockbroker, bank manager, solicitor or accountant or other independent
financial adviser duly authorised under the Financial Services and Markets Act
2000 if resident in the United Kingdom or, if not, another appropriate
independent financial adviser.


Further details of the Alternative Offer will be set out in the Offer Document.


3.                Compulsory acquisition and cancellation of AIM listing


If Town Centre Restaurants receives acceptances under the Offer in respect of,
and/or otherwise acquires, 90 per cent. or more of the Giardino Shares to which
the Offer relates, Town Centre Restaurants intends to exercise its rights under
sections 428 to 430F of the Act to compulsorily acquire the remaining Giardino
Shares.


If Town Centre Restaurants receives acceptances under the Offer in respect of,
and/or otherwise acquires, 75 per cent. or more of the Giardino Shares and the
Offer becomes or is declared unconditional in all respects, Town Centre
Restaurants intends to procure the making of an application by Giardino to the
London Stock Exchange for the cancellation of the trading of Giardino Shares on
AIM. It is anticipated that such cancellation will take effect no earlier than
20 business days after the date on which the Offer becomes or is declared
unconditional in all respects. The cancellation of trading on AIM would
significantly reduce the liquidity and marketability of any Giardino Shares not
acquired under the Offer.


It is also proposed that, following the Offer becoming or being declared
unconditional in all respects and after the cancellation of the trading of
Giardino Shares on AIM, Giardino will be re-registered as a private company
under the relevant provisions of the Act.


4.                Background to and reasons for the Offer


Following the announcement of a profit warning on 13 February 2002 the Giardino
Group has significantly curtailed its programme of expansion through opening new
sites and adopted its current policy of consolidating its operations. In the
current financial year the Group has experienced an overall decline in like for
like sales and a number of sites remain loss making although the Giardino Group
has successfully managed its cost base and trades profitably in a cash
generative manner. The financial performance has adversely affected Giardino's
share price performance prior to the announcement, on 30 September 2003, of a
possible offer for the Company from Management. In view of the above, your Board
has been exploring options to increase shareholder value over recent months.


The Company has considered a share buyback and approaches from trade buyers and
venture capitalists. These approaches have been at lower valuations than the
Offer being made by Town Centre Restaurants. Consequently the Independent
Directors believe that shareholders' interests would be best served by accepting
the Offer.

In order that other Giardino Shareholders have the option of receiving all the
consideration payable under the Offer in the form of cash, David Leveton and
Franco Gasparelli have elected to accept the Alternative Offer on the terms set
out in the Offer Document. Whilst David Leveton and Franco Gasparelli have
elected to accept the Alternative Offer for the reasons stated above, Giardino
Shareholders are advised to consider (in the light of their own circumstances),
inter alia, the risk factors and investment considerations to be set out in
paragraph 3 of the letter from BDO Stoy Hayward Corporate Finance in the Offer
Document if they are considering whether to elect for the Alternative Offer.


5.                Shareholdings and irrevocable undertakings to accept the Offer


Mark Winter and Ron Sutcliffe, both directors of Town Centre Restaurants, own
397,065 Giardino Shares and 19,600 Giardino Shares respectively and have each
been granted 45,750 options to subscribe for Giardino Shares. Mark's wife, Mrs S
Winter, also holds 45,750 options to subscribe for Giardino Shares.


Town Centre Restaurants has received irrevocable undertakings to accept the
Offer from all of the directors of Giardino, other than Mark Winter and Ron
Sutcliffe, in respect of the whole of their beneficial holdings of Giardino
Shares and from certain members of their immediate families. These irrevocable
undertakings amount, in aggregate, to 10,760,780 Giardino Shares, representing
approximately 52.8 per cent. of the issued share capital of Giardino. These
irrevocable undertakings will remain binding even in the event of a higher offer
being made for Giardino, but cease to be binding in the event that the Offer
lapses or is withdrawn.


The irrevocable undertakings received from David Leveton and Franco Gasparelli
also include undertakings to elect for the Alternative Offer in respect of the
whole of their beneficial holdings of Giardino Shares. These irrevocable
undertakings amount, in aggregate, to 10,617,880 Giardino Shares, representing
approximately 52 per cent. of the issued share capital of Giardino. To the
extent that Giardino Shareholders, other than Franco Gasparelli and David
Leveton, elect to receive the Alternative Offer, the amount of the Alternative
Offer received by Franco Gasparelli and David Leveton will be reduced
accordingly. Franco Gasparelli and David Leveton are each party to the
Inter-Creditor Agreement, further details of which are set out in the Offer
Document. Other Giardino Shareholders who accept the Offer and elect to receive
the Alternative Offer will not be required to adhere to the terms of the
Inter-Creditor Agreement.


In addition, Town Centre Restaurants has received irrevocable undertakings from
certain institutional shareholders to accept the Offer in respect of a further
4,808,634 Giardino Shares, representing approximately 23.6 per cent. of
Giardino's issued share capital. These irrevocable undertakings will cease to be
binding in the event that a competing offer is made for Giardino on terms which
represent an improvement of 10 per cent. or more over the value of the Offer.


In addition, pursuant to the Share Exchange Agreement (which is conditional on
the Offer becoming or being declared unconditional in all respects), Mark Winter
and Ron Sutcliffe have agreed to sell and Town Centre Restaurants has agreed to
acquire 416,665 Giardino Shares in aggregate representing approximately 2 per
cent. of Giardino's issued ordinary share capital.


Accordingly, Town Centre Restaurants has received irrevocable undertakings to
accept the Offer and undertakings to sell Giardino Shares in respect of, in
aggregate, 15,986,179 Giardino Shares representing approximately 78.4 per cent.
of Giardino's issued share capital.


6.                Information on Town Centre Restaurants


Town Centre Restaurants is a private limited liability company newly
incorporated in England and Wales which has been established for the purpose of
making the Offer. It has not traded since incorporation nor entered into any
obligations other than in connection with the Offer and the financing thereof.
The board of Town Centre Restaurants currently comprises Mark Winter and Ron
Sutcliffe. Under the terms of Town Centre Restaurants' Articles of Association,
Uberior, a wholly-owned subsidiary of Bank of Scotland which will invest in Town
Centre Restaurants, will have the right to appoint a director to the board of
Town Centre Restaurants if the Offer becomes or is declared unconditional in all
respects.


Subject to the Offer becoming or being declared unconditional in all respects,
the Investors have agreed in the Investment Agreement to subscribe for a total
of £466,668 in cash for Town Centre Restaurants Equity Shares at a subscription
price of £1 per share. In addition Mark Winter and Ron Sutcliffe have agreed to
exchange their Giardino Shares for an aggregate of 333,332 Town Centre
Restaurants Ordinary Shares pursuant to the Share Exchange Agreement.


Further information on Town Centre Restaurants will be set out in the Offer
Document.


7.                Information on the Investors


The Investors comprise the Management, Town Centre Restaurants EBT and Uberior.


(a) Management


Set out below are the names of those directors of Giardino and other employees
of the Giardino Group who will invest directly in Town Centre Restaurants:

Management    Position in Giardino            Anticipated Position in Town
                                              Centre Restaurants

Mark Winter   Operations Director, Restaurant Chief Executive Officer
              Division
Ron           Finance Director                Finance Director
Sutcliffe
Michele       Operations Manager, Cafe        Associate Director, Cafe
Montagna      Giardino Division               Operations
Michaela      Management Accountant           Associate Director, Finance
Fisher
Craig         Distribution and Warehouse      Associate Director, Supply Chain
Saunders      Manager



In addition, Town Centre Restaurants EBT, whose beneficiaries will be directors
and employees of Giardino, will invest in Town Centre Restaurants.


Further information on the arrangements with the Management will be set out in
the Offer Document.


(b) Uberior (which is a wholly owned subsidiary of Bank of Scotland)


HBOS, the ultimate owner of Uberior, is a major UK clearing bank with a long
term credit rating of AA minus from Standard & Poor's. The latest audited annual
accounts of HBOS in respect of the financial year ended 31 December 2002,
disclosed consolidated gross assets of £355,080 million, consolidated net assets
of £15,908 million and consolidated pre-tax profits on ordinary activities of
£2,909 million.


8.             Profit forecast for the year ending 31 January 2004


Giardino's current financial year ends on 31 January 2004 and on 10 October 2003
Giardino reported its unaudited interim results for the six months ended 31 July
2003, which will appear in the Offer Document. This stated that Giardino was
confident of achieving market expectations for the year as a whole. At the time
the market expectation was that before profit before tax excluding exceptional
items would be approximately £2.3 million.


Since 10 October 2003 trading conditions have continued to be difficult and
turnover has not reached the levels expected at the time of the profit forecast.
In light of these difficult trading conditions the directors of Giardino have
revised their assessment of the forecast outcome for the year ending 31 January
2004. In the absence of unforeseen circumstances and on the bases of preparation
and principal assumptions set out in the Offer Document, the directors of
Giardino forecast that Giardino will report profits before tax of between £2.1
million and £2.3 million excluding exceptional items. In the light of the
projected results, the directors of Giardino believe that a further impairment
of the Company's assets will be required and estimate that this further
impairment will amount to £232,000.


The bases and assumptions underlying the profit forecast will be set out in the
Offer Document.


9.                Information on Giardino


Giardino is a company whose principal activity is the operation of restaurants
and sandwich bars.


In the financial period ended 31 January 2003, Giardino Group reported a
turnover from continuing activities of £39.23 million and achieved profit before
tax and exceptional items from continuing activities of £0.72 million. As at
that date, Giardino Group had net assets of £7.88 million.


The profit forecast by Giardino Group for the year ended 31 January 2004 will be
set out in the Offer Document. The basis of preparation of the profit forecast
together with the assumptions on which it is based and the letter from each of
Horwarth Clark Whitehill and Evolution Beeson Gregory relating to the profit
forecast will be set out in Appendix VI of the Offer Document.


Further financial information on Giardino will be set out in the Offer Document.


10.                Management and employees


The board of Town Centre Restaurants has given assurances to the Independent
Directors that the existing employment rights, including pension rights, of the
management and employees of Giardino Group will be fully safeguarded.


The Independent Directors have agreed to resign from the Board of Giardino on
the Offer becoming or being declared unconditional in all respects without
compensation for loss of office save that John Moxon will receive £7,500 in lieu
of notice and an ex-gratia payment of £12,500.


11.           Giardino Share Option Schemes


The Offer extends to any Giardino Shares issued as a result of the exercise of
options under the Giardino Share Option Schemes prior to the date on which the
Offer closes. If the Offer becomes or is declared unconditional in all respects,
appropriate proposals will be made to the holders of unexercised options under
the Giardino Share Option Schemes.


12.                Inducement Fee


The Company has entered into an agreement with Town Centre Restaurants under
which it has agreed to make a payment to Town Centre Restaurants of up to
£163,195.20 in certain circumstances, including in the event that the
Independent Directors withdraw their recommendation of the Offer or a third
party offer is made and becomes or is declared wholly unconditional. The
Independent Directors believe that, in order to secure an offer for Giardino
Shareholders, this agreement is in the best interests of Giardino Shareholders.


13.                Financing of the Offer


Full acceptance of the Offer (assuming full take-up of the Alternative Offer by
David Leveton and Franco Gasparelli in accordance with their irrevocable
undertakings and all outstanding options over Giardino Shares capable of being
exercised while the Offer remains open for acceptance are so exercised and
completion of the Share Exchange Agreement) would require a maximum cash payment
of approximately £14.2 million by Town Centre Restaurants, which will be funded
out of Town Centre Restaurants resources made available by the Investors
pursuant to the Investment Agreement and through bank facilities which have been
provided by the Bank of Scotland. Details of these financing arrangements will
be set out in the Offer Document.



                                   APPENDIX I


                            CONDITIONS OF THE OFFER


The Offer will be subject to the following conditions:


(a)           valid acceptances being received (and not, where permitted,
withdrawn) by not later than 3.00 p.m. on 13 January 2004, the first closing
date of the Offer, (or such later time(s) and/or date(s) as Town Centre
Restaurants may, subject to the rules of the Code, decide) in respect of not
less than 90 per cent. (or such lesser percentage as Town Centre Restaurants may
decide) in nominal value of the Giardino Shares to which the Offer relates,
provided that, unless agreed by the Panel, this condition will not be satisfied
unless Town Centre Restaurants shall have acquired or agreed to acquire
(pursuant to the Offer or otherwise), directly or indirectly, Giardino Shares
carrying, in aggregate, over 50 per cent. of the voting rights then normally
exercisable at general meetings of Giardino on such basis as may be required by
the Panel (including for this purpose, to the extent (if any) required by the
Panel, any voting rights attaching to any shares which are unconditionally
allotted or issued before the Offer becomes or is declared unconditional as to
acceptances, whether pursuant to the exercise of conversion or subscription
rights or otherwise); and for this purpose (i) the expression 'Giardino Shares
to which the Offer relates' shall be construed in accordance with sections
428-430F inclusive of the Act; and (ii) Giardino Shares which have been
unconditionally allotted but not issued shall be deemed to carry the voting
rights which they will carry on issue;


(b)            no government or governmental, quasi-governmental, supranational,
statutory or regulatory body, or any court, institution, investigative body,
association, trade agency or professional or environmental body or (without
prejudice to the generality of the foregoing) any other person or body in any
jurisdiction (each, a 'Relevant Authority') having decided to take, instituted,
implemented or threatened any action, proceedings, suit, investigation,
reference or enquiry or enacted, made or proposed any statute, regulation or
order or otherwise taken any other step or done any thing, and there not being
outstanding any statute, legislation or order, that would or might:-


(i)                   restrict, restrain, prohibit, delay, impose additional
conditions or otherwise challenge or require the amendment of obligations with
respect to, or otherwise interfere with the implementation of, the Offer or the
acquisition of any Giardino Shares by Town Centre Restaurants or the control of
Giardino by Town Centre Restaurants or any matters arising therefrom;


(ii)             require, prevent, delay or affect the divestiture by Town
Centre Restaurants or Giardino or any of Giardino's subsidiaries, subsidiary
undertakings or associated undertakings (including any company of which 20 per
cent. or more of the voting capital is held by the Giardino Group or any
partnership, joint venture, firm or company in which any of them may be
interested) (together the 'wider Giardino Group') of all or any portion of their
businesses, assets or property or of any Giardino Shares or other securities in
Giardino or impose any limitation on the ability of any of them to conduct their
respective businesses or own their respective assets or properties or any part
thereof to an extent which is material in the context of the Offer on the wider
Giardino Group taken as a whole, or as the case may be, Town Centre Restaurants;


(iii)                impose any limitation on, or result in a material delay in,
the ability of Town Centre Restaurants to acquire or hold or exercise
effectively, directly or indirectly all, or any rights of ownership in respect
of shares or other securities (or the equivalent) in, or to exercise management
control over, any member of the wider Giardino Group;


(iv)               save pursuant to the Offer or Part XIIIA of the Act, require
Town Centre Restaurants or any member of the wider Giardino Group to offer to
acquire any shares or other securities or rights thereover in any member of the
wider Giardino Group owned by any third party;


(v) make the Offer or its implementation or the proposed acquisition of Giardino
or any member of the wider Giardino Group or of any Giardino Shares or any other
shares or securities in, or control of, Giardino by Town Centre Restaurants,
illegal, void or unenforceable in or under the laws of any jurisdiction;


(vi) impose any material limitation on the ability of Town Centre Restaurants or
any member of the wider Giardino Group to integrate or co-ordinate its business,
or any part of it, with all or any part of the business of Town Centre
Restaurants or any member of the wider Giardino Group; or


(vii)              otherwise adversely affect any or all of the businesses,
assets, prospects or profits of Town Centre Restaurants or any member of the
wider Giardino Group to an extent which is material in the context of the Offer
on the wider Giardino Group taken as a whole, or as the case may be, Town Centre
Restaurants,


and all applicable waiting and other time periods during which such Relevant
Authority could decide to institute, implement or threaten any such action,
proceeding, suit, investigation, enquiry or reference or otherwise intervene
having expired, lapsed or been terminated;


(c)           all authorisations, orders, grants, recognitions, confirmations,
certificates, consents, clearances, licences, permissions and approvals, in any
jurisdiction, deemed reasonably necessary or appropriate by Town Centre
Restaurants for or in respect of the Offer, the proposed acquisition of any
shares or securities in, or control of, Giardino or any member of the wider
Giardino Group by Town Centre Restaurants or the carrying on of the business of
any member of the wider Giardino Group or Town Centre Restaurants or any matters
arising therefrom being obtained in terms reasonably satisfactory to Town Centre
Restaurants from all appropriate Relevant Authorities or (without prejudice to
the generality of the foregoing) from any persons or bodies with whom any
members of the wider Giardino Group or Town Centre Restaurants has entered into
contractual arrangements and such authorisations, orders, grants, consents,
clearances, licences, permissions and approvals remaining in full force and
effect and there being no intimation of any intention to revoke or not to renew
the same and all necessary filings and applications having been made, all
appropriate waiting and other time periods (including extensions thereto) under
any applicable legislation and regulations in any applicable jurisdiction having
expired, lapsed or been terminated and all necessary statutory or regulatory
obligations in any jurisdiction in respect of the Offer or the proposed
acquisition of Giardino by Town Centre Restaurants or of any Giardino Shares or
any matters arising therefrom having been complied with;

(d)           save as disclosed in writing to Town Centre Restaurants prior to
the date of the announcement of the Offer, no notice having been received by any
member of the Giardino Group from the Relevant Authorities or any party with
whom any member of the wider Giardino Group has any contractual or other
relationship that the interests held by any member of the wider Giardino Group
under licences, leases, consents, permits and other rights will not be
materially (in the context of the wider Giardino Group taken as a whole)
adversely amended or otherwise affected by the Offer or the proposed acquisition
of Giardino or any matters arising therefrom, that such licences, leases,
consents, permits and other rights are in full force and effect and that there
is no intention to revoke or amend any of the same;

(e)           save as disclosed in writing to Town Centre Restaurants prior to
the date of the announcement of the Offer, there being no provision of any
agreement, instrument, permit, licence, lease or other arrangement to which any
member of the wider Giardino Group is a party or by or to which it or any of its
assets may be bound or subject which, as a consequence of the Offer or the
acquisition of Giardino or because of a change in the control or management of
Giardino or any member of the Giardino Group or any matters arising therefrom or
otherwise, could or might reasonably expect to have the result that:-

(i)                   any moneys borrowed by, or other indebtedness, actual or
contingent, of, or grant available to, any member of the wider Giardino Group
becomes or is capable of being declared repayable immediately or earlier than
the repayment date stated in such agreement, instrument or other arrangement or
the ability of any member of the wider Giardino Group to borrow moneys or incur
indebtedness is withdrawn or inhibited or adversely affected;


(ii)                 any mortgage, charge or other security interest is created
over the whole or any part of the business, property or assets of any member of
the wider Giardino Group or any such security (whenever arising) becomes
enforceable;


(iii) any such agreement, instrument, permit, licence or other arrangement, or
any right, interest, liability or obligation of any member of the wider Giardino
Group therein, is terminated or adversely modified or affected or any adverse
action is taken or onerous obligation arises thereunder in each case to an
extent which is material in the context of the Offer and the wider Giardino
Group taken as a whole;


(iv)               the value of any member of the wider Giardino Group or its
financial or trading position or prospects is prejudiced or adversely affected
to an extent which is material in the context of the wider Giardino Group taken
as a whole;


(v) any asset or interest or, other than in the ordinary course of business, any
asset or interest of the wider Giardino Group being or falling to be charged or
disposed of or any right arising under which any such asset or interest could be
required to be disposed of or charged or could cease to be available to any
member of the wider Giardino Group, in each case otherwise than in the ordinary
course of business;


(vi)               the rights, liabilities, obligations or interests or business
of any member of the wider Giardino Group under any such arrangement, agreement,
licence, permit, lease or instrument or in or with any other person, firm or
company (or any arrangement relating to such interest or business) is terminated
or adversely modified or affected or any onerous obligations arising or any
adverse actions being taken thereafter thereunder in each case to an extent
which is material in the context of the Offer and the wider Giardino Group taken
as a whole;


(vii)              any member of the wider Giardino Group ceases to be able to
carry on business under any name under which it currently does so; or


(viii)            any liabilities (actual or contingent) which arise or become
apparent in any such member of the wider Giardino Group to an extent which is
material in the context of the wider Giardino Group taken as a whole,


and no event having occurred which, under any provision of any agreement,
arrangement, licence or other instrument to which any member of the wider
Giardino Group is a party or by or to which any such member or any of its assets
are bound or subject, would be reasonably likely to result in any events or
circumstances as are referred to in subparagraphs (i) to (viii) in this
subparagraph (e);


(f)            since 31 January 2003 (being the date to which the latest
published audited report and accounts of Giardino were made up) and save as
disclosed in Giardino's published report and accounts for the year ended 31
January 2003 or save as announced publicly and in each case delivered to the
Company Announcements Office of the London Stock Exchange prior to 19 December
2003 being the date upon which the Offer was announced, no member of the
Giardino Group having:

(i)                   issued or agreed to issue or authorised or proposed the
issue of additional shares of any class or issued or authorised or proposed the
issue of or granted securities convertible into or rights, warrants or options
to subscribe for or acquire such shares or convertible securities or redeemed,
purchased or reduced or announced any intention to do so or made any other
change to any part of its share capital;


(ii)                 recommended, declared, paid or made or proposed to
recommend, declare, pay or make any dividend, bonus or other distribution other
than dividends lawfully paid to Giardino or wholly-owned subsidiaries of
Giardino and other than the interim dividend declared on 10 October 2003 (the
'Interim Dividend');


(iii)                authorised or proposed or announced its intention to
propose any merger or acquisition or disposal or transfer of any body corporate,
partnership or business or otherwise than in the ordinary course of business,
acquired, transferred, disposed, mortgaged, charged or created any security
interest over any assets or any right, title or interest in any asset (including
shares and trade investments) or any change in its share or loan capital;


(iv)               issued or authorised or proposed the issue of any debentures;


(v)                 otherwise than in the ordinary course of business, incurred
or increased any indebtedness or contingent liability which would be material in
the context of the wider Giardino Group taken as a whole;

(vi)               disposed of or transferred, mortgaged or encumbered any
material asset or any right, title or interest in any such asset or entered into
or varied any contract, commitment or arrangement (whether in respect of capital
expenditure or otherwise) which is of a long term or unusual nature or which
involves or could involve an obligation of a nature or magnitude which is
material in the context of the Giardino Group taken as a whole or authorised,
proposed or announced any intention to do so;


(vii)              entered into, varied or terminated or proposed to enter into,
vary or terminate any contract, or other transaction (otherwise than in the
ordinary course of business) which is of a long term or unusual or onerous
nature or announced any intention to do so;


(viii)            save as disclosed in the Offer Document entered into, or
varied the terms of, any contract or agreement with any of the directors or
senior executives of Giardino;


(ix)                taken or proposed any corporate action or had any legal
proceedings instituted or threatened against it for its winding-up (voluntary or
otherwise), dissolution or reorganisation or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar officer of all or any
of its assets and revenues;


(x)                  waived or compromised any claim or authorised any such
waiver or compromise which is or might reasonably be expected to be material in
the context of the wider Giardino Group taken as a whole;


(xi)                entered into, implemented, effected, authorised, or proposed
or announced its intention to enter into, implement, effect, authorise or
propose any reconstruction, amalgamation, commitment or scheme otherwise than in
the ordinary course or business;


(xii)               made any amendment to its memorandum or articles of
association;


(xiii)             entered into or varied or terminated or authorised, proposed
or announced its intention to enter into, vary or terminate any contract,
transaction, commitment or arrangement which is or is reasonably likely to be
restrictive on the business of any member of the wider Giardino Group or Town
Centre Restaurants or which is material in the context of the Giardino Group
taken as a whole;


(xiv)             made or agreed or consented to any significant change to the
terms of the trust deeds constituting the pension schemes established for its
directors and/or employees and/or their dependants or to the benefits which
accrue, or to the pensions which are payable thereunder, or to the basis on
which qualification for or accrual or entitlement to such benefits or pensions
are calculated or determined, or to the basis upon which the liabilities
(including pensions) of such pension schemes are funded or made, or agreed or
consented to, any change to the trustees;


(xv)              entered into any contract, commitment or agreement with
respect to any of the transactions or events referred to in this condition (f);
and

(xvi)             been unable or admitted that it is unable to pay its debts or
having stopped or suspended (or threatened to stop or suspend) payment of its
debts generally or ceased or threatened to cease carrying on all or a
substantial part of its business;


(g)           since 31 January 2003 (being the date to which the latest
published audited report and accounts of Giardino were made up) and save as
disclosed in Giardino's published report and accounts for the year ended 31
January 2003 or save as announced publicly and in each case delivered to the
Company Announcements Office of the London Stock Exchange prior to 19 December
2003 being the date upon which the Offer was announced:

(i)                   no litigation, arbitration, prosecution or other legal
proceedings having been instituted, announced or threatened or become pending or
remained outstanding by or against any member of the wider Giardino Group or to
which any member of the wider Giardino Group is or may become a party (whether
as plaintiff, defendant or otherwise) which might reasonably be expected to be
material in the context of the wider Giardino Group taken as a whole;


(ii)                 no adverse change having occurred in the business, assets,
financial or trading position, profits or prospects of any member of the wider
Giardino Group in each case to an extent which is or might reasonably be
expected to be material in the context of the wider Giardino Group taken as a
whole;


(iii)                no investigation by any Relevant Authority having been
threatened, announced, implemented or instituted or remaining outstanding which
each is or might reasonably be expected to be material in the context of the
wider Giardino Group taken as a whole;


(iv)               no contingent or other liability of any member of the wider
Giardino Group having arisen which is or might reasonably be expected to be
material in the context of the wider Giardino Group taken as a whole; and


(v)                 no steps have been taken and no omissions having been made
which are likely to result in the withdrawal, cancellation, termination or
modification of any licence held by any member of the wider Giardino Group which
is necessary for the proper carrying on of its business and the withdrawal,
cancellation, termination or modification of which is or might reasonably be
expected to be material in the context of the wider Giardino Group taken as a
whole;


(h)           Town Centre Restaurants not having discovered that:

(i)                   any business, financial or other information concerning
any member of the Giardino Group disclosed, publicly or otherwise at any time to
Town Centre Restaurants by, or on behalf of, any member of the Giardino Group,
either contains a misrepresentation of fact or omits to state a fact necessary
to make the information contained therein not misleading to the extent which is
material in the context of the Offer; or


(ii) any member of the wider Giardino Group is subject to any liability, actual
or contingent, which is not disclosed in the annual report and accounts of
Giardino for the financial period ended 31 January 2003 or in the Offer Document
and which is or might reasonably be expected to be material in the context of
the wider Giardino Group taken as a whole;


(i)            Town Centre Restaurants not having discovered that, save as
publicly announced by Giardino before the date of announcement of the Offer:

(i)                   any past or present member of the wider Giardino Group has
not complied with all applicable legislation or regulations of any jurisdiction
with regard to the storage, disposal, discharge, spillage, leak or emission of
any waste or hazardous substance or any substance likely to impair the
environment or to harm human health or otherwise relating to environmental
matters (which non-compliance might give rise to any liability (whether actual
or contingent) on the part of any member of the wider Giardino Group) which
would be material to the wider Giardino Group taken as a whole or that there has
otherwise been any such disposal, discharge, spillage, leak or emission (whether
or not the same constituted a non-compliance by any person with any such
legislation or regulations and wherever the same may have taken place) which in
any such case might give rise to any liability (whether actual or contingent) on
the part of any member of the wider Giardino Group and which is or might
reasonably be expected to be material in the context of the wider Giardino Group
taken as a whole;


(ii)                 there is or is reasonably likely to be any liability
(whether actual or contingent) to make good, repair, reinstate or clean up any
property now or previously owned, occupied or made use of by any past or present
member of the wider Giardino Group or any controlled waters under any
environmental legislation, regulation, notice, circular or order of any Relevant
Authority or third party or otherwise in each case which is material in the
context of the wider Giardino Group taken as a whole;


(iii)                circumstances exist (whether as a result of the making of
the Offer or otherwise) which are reasonably likely to lead to any Relevant
Authority instituting or any member of the wider Giardino Group or Town Centre
Restaurants being required to institute, an environmental audit or take any
other steps which in any such case might result in any actual or contingent
liability to improve or install new plant or equipment or make good, repair,
re-instate or clean up any land or other asset now or previously owned, occupied
or made use of by any member of the wider Giardino Group in each case which is
or might reasonably be expected to be material in the context of the wider
Giardino Group taken as a whole; or


(iv) circumstances exist whereby a person or class of persons would be
reasonably likely to have any claim or claims in respect of any product or
process of manufacture or materials used therein now or previously manufactured,
sold or carried out by any past or present member of the wider Giardino Group,
in each case which which is or might reasonably be expected to be material in
the context of the wider Giardino Group taken as a whole.


Town Centre Restaurants reserves the right to waive all or any of conditions (b)
to (i) (inclusive) above, in whole or in part. Conditions (b) to (i) (inclusive)
must be satisfied as at, or waived on or before, 21 days after the later of 13
January 2004 and the date on which condition (a) is fulfilled (or in each case
such later date as the Panel may agree) provided that Town Centre Restaurants
shall be under no obligation to waive or treat as satisfied any of conditions
(b) to (i) (inclusive) by a date earlier than the latest date specified above
for the satisfaction thereof notwithstanding that the other conditions of the
Offer may at such earlier date have been waived or fulfilled and that there are
at such earlier date no circumstances indicating that any of such conditions may
not be capable of fulfilment.


If Town Centre Restaurants is required by the Panel to make an offer for
Giardino Shares under the provisions of Rule 9 of the Code, Town Centre
Restaurants may make such alterations to the conditions as are necessary to
comply with the provisions of that Rule.



                                  APPENDIX II


                                  DEFINITIONS


In this announcement, unless the context otherwise requires, the following
expressions have the following meanings:


'Act'                            the Companies Act 1985 (as amended)



'AIM'                            the Alternative Investment Market of the London Stock Exchange



'Alternative Offer'              the alternative by which Giardino Shareholders (other than
                                 US persons and certain other overseas shareholders) validly accepting the Offer
                                 may elect to receive a mix of cash, Preference Shares and Unsecured Loan Notes
                                 in lieu of all (but not part) of the cash consideration to which they would
                                 otherwise have been entitled under the Offer


'Australia'                      the commonwealth of Australia, its states, territories or possessions


'Bank of Scotland'               the Governor and Company of the Bank of Scotland, a subsidiary of HBOS


'BDO Stoy Hayward Corporate      BDO Stoy Hayward Corporate Finance, a division of
Finance'                         BDO Stoy Hayward, Chartered Accountants, which is authorised and regulated
                                 in the UK by the Financial Services Authority to carry on investment business,         
                                 financial advisor to Town Centre Restaurants


'Board' or 'Directors'           the board of directors of Town Centre Restaurants or
                                 Giardino (as the case may be)


'Canada'                         Canada, its possessions and territories and all areas 
                                 subject to its jurisdiction or any political sub-division thereof


'Closing Price'                  the closing middle-market price of a Giardino Share as derived from the London Stock   
                                 Exchange Daily Official List


'Code' or 'City Code'            the City Code on Takeovers and Mergers


'Company' or 'Giardino'          Giardino Group PLC


'Form of Acceptance'             the form of acceptance, authority and (where appropriate)
                                 election relating to the Offer which accompanies the Offer Document


'Giardino Share Option Schemes   the Giardino Group 2000 approved share option
                                 scheme, the option agreement dated 5 June 2000 between Giardino and David Coffer
                                 and the option agreement dated 5 June 2000 between Giardino and Anthony Lyons


'Giardino Shareholders'          holders of Giardino Shares


'Giardino Shares'                the ordinary shares of 20 pence each in the capital of Giardino


'Group' or 'Giardino Group'      Giardino Group PLC and its subsidiary undertakings


'HBOS'                           HBOS plc


'Independent Directors'          John Moxon, David Leveton and Franco Gasparelli


'Inter-Creditor Agreement'       the inter-creditor agreement dated 19 December 2003
                                 between (1) Town Centre Restaurants and (2) the Bank of Scotland in various
                                 capacities and (3) David Leveton and Franco Gasparelli in their capacity as
                                 holders of Unsecured Loan Notes and Preference Shares issued pursuant to the
                                 Alternative Offer


'Investment Agreement'          (i) an investment agreement dated 19 December 2003
                                between (1) Town Centre Restaurants, (2) the Management, (3) The Governor and
                                Company of the Bank of Scotland and (4) Uberior pursuant to which the
                                Management, Uberior and Town Centre Restaurants EBT are to subscribe for shares
                                in Town Centre Restaurants in the event that the Offer becomes or is declared
                                wholly unconditional and which will then govern their relationship as
                                shareholders in Town Centre Restaurants and (ii) a subscription letter from Town
                                Centre Restaurants EBT to Town Centre Restaurants dated 19 December 2003
                                pursuant to which Town Centre Restaurants EBT is to subscribe for shares in Town
                                Centre Restaurants in the event that the Offer is or becomes wholly unconditional


'Investors'                     shareholders in Town Centre Restaurants after the Offer becomes or is declared          
                                unconditional in all respects, comprising the Management, Town Centre Restaurants EBT   
                                and Uberior


'Japan'                         Japan, its cities, prefectures, territories and possessions


'London Stock Exchange'         London Stock Exchange plc


'Management'                    Mark Winter, Ron Sutcliffe, Michele Montagne, Michaela Fisher and Craig Saunders


'Offer'                         the recommended cash offer by BDO Stoy Hayward Corporate Finance on behalf of Town      
                                Centre Restaurants to acquire all of the issued and to be issued Giardino Shares, other 
                                than those already acquired or to be acquired pursuant to the Share Exchange Agreement, 
                                on the terms and subject to the conditions set out in the Offer Document and the
                                Form of Acceptance including, where the context so permits, the Alternative
                                Offer and, where the context so requires, any subsequent revision, variation,
                                extension or renewal of such offer.


'Offer Document'                the Offer Document dated 22 December 2003 and any other document containing the Offer


'Panel'                         The Panel on Takeovers and Mergers


'pounds' or '£'                 UK pounds sterling


'Preference Shares'             the preference shares of 1p each in the capital of Town Centre Restaurants


'Securities Act'                the United States Securities Act of 1933 (as amended)


'Share Exchange Agreement'      a share exchange agreement dated 19 December 2003
                                between (1) certain of the Management and (2) Town Centre Restaurants pursuant
                                to which certain of the Management have agreed to sell, and Town Centre
                                Restaurants has agreed to acquire, Giardino Shares in exchange for Town Centre
                                Restaurants Ordinary Shares


'subsidiary', 'subsidiary       shall be construed in accordance with the Act (but for this purpose
undertaking', 'associated       ignoring paragraph 20(I)(b) of Schedule 4A of the Act)
undertaking' and 'undertaking'


'Town Centre Restaurants'       Town Centre Restaurants Limited


'Town Centre Restaurants        the A ordinary shares of £1 each in the capital of Town Centre
A Shares'                       Restaurants


'Town Centre Restaurants EBT'   the Town Centre Restaurants Employee Benefit Trust


'Town Centre Restaurants        the ordinary shares of £1 each in the capital of Town
Centre Restaurants
Ordinary Shares'


'Town Centre Restaurants        the Town Centre Restaurants A Shares and Town Centre Restaurants

Equity Shares'                  Ordinary Shares


'Uberior'                       Uberior Investments plc, a wholly-owned subsidiary of HBOS


'UK'                            the United Kingdom of Great Britain and Northern Ireland


'United States' or 'US'         The United States of America, its territories and
                                possessions, any State of the United States of America and the District of
                                Columbia and all other areas subject to its jurisdiction


'Unsecured Loan Notes'          the unsecured loan notes 2007 to be issued by Town Centre
                                Restaurants as part of the Alternative Offer


'US person(s)'                  as defined in Regulation S promulgated under the Securities Act


All the times referred to in this announcement are London times.







                      This information is provided by RNS
            The company news service from the London Stock Exchange