Pizza Express owners put counterbid for Ask Central on the menu

A battle to become the capo di capi of the country's pizza chains erupted yesterday between City Centre Restaurants and TDR Capital, the private equity fund that controls Pizza Express.

The pair are locked in a fight for control of Ask Central after TDR announced yesterday it was mulling an offer for the rival pizza chain of at least 177p a share in cash. Ask Central had already agreed to a previous offer from City Centre, made in December, but last night said that if a firm offer came from TDR it would have to consider it. TDR, which won a fierce takeover battle for Pizza Express last year, may well launch a hostile bid for Ask Central. In what promises to be one of the most colourful takeover battles of the year, TDR plans to merge its Pizza Express group with Ask Central, which also owns the Zizzi chain, to create a group dominating pizza and pasta eateries.

City Centre was last night mulling whether to improve the terms of its offer. It repeated the logic of combining Ask Central, which is a high street business, with its own airport and out-of-town restaurant operations. These include the Frankie & Bennys chain and Garfunkels.

City Centre's offer is funded through shares and a special cash dividend. At the start of trading yesterday City Centre's offer was worth 190p a share to Ask Central shareholders. News of a possible rival bid from TDR knocked City Centre's share price 1.75p, reducing the value of its offer to 185p. Ask Central shares closed 5.5p higher, also at 185p.

A key player in the pizza wars will be the huge US fund manager Fidelity, which owns 21 per cent of Ask Central but also owns 10 per cent of City Centre.

Fidelity also knows TDR, having decided to retain its 9 per cent investment in Pizza Express when TDR made its offer for that business last year.