Australia's River Capital targets UK cake shop chain

Cake Box said in a filing that it received an unsolicited offer of GBP 1.60 per share from River Capital. It rejected the approach, saying it materially undervalued the company. The price equates to a market capitalisation of GBP 64m (USD 82.3m). Cake Box’s stock closed up 4% on July 20 at GBP 1.60.

Melbourne-based River Capital was established in 1996 as an investment vehicle to manage the portfolio interests of several families and individuals. Since then, the firm’s investor base has grown to more than 600 and assets under management now stand at approximately AUD 1bn (USD 678m), of which one quarter comes from the founding families and management team.

River Capital also expanded the scope of its activities to include strategic investments in privately held companies, typically putting AUD 20m-AUD 100m to work in each deal. The firm bought The Cheesecake Shop from PAG in 2022. PAG held the business for five years, having acquired it for around AUD 100m.

The Cheesecake Shop was founded in 1991 by brothers Warwick and Robert Konopacki, who relied on traditional recipes learned from their Polish mother. There are now more than 225 stores operated on a franchise basis across Australia and New Zealand. A UK-based master franchise was bought out by local management in 2020.

Cake Box opened its first concept store in London in 2008 and listed on AIM in 2018. There are now 206 franchised stores. Total franchise sales reached GBP 72.1m in for the 12 months ended March 2023, up 9.6% year-on-year. EBITDA was GBP 6.7m and net profit came to GBP 4.3m, down 24.3% and 31.7%, respectively.

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• Topics
• Australasia
• Europe
• Buyouts
• Consumer
• Australia
• United Kingdom
• River Capital
• PAG