O'Dwyer brothers linked to management team's bid for Dublin bar and hotel group

A management group thought to include 46 per cent shareholders Liam and Des O'Dwyer has made an approach to buy Capital Bars, which operates 11 theme pubs and superpubs and three hotels in Dublin.

A spokesman for Capital Bars would not elaborate on a brief statement which said that "certain members" of its management team had made an approach about a possible offer which would not be higher than 21p sterling per share.

This indicated maximum price would value Capital Bars at £9.5 million sterling (€15.8 million).

Market sources said, however, that it was difficult to see anybody other than the O'Dwyer brothers as those involved in the approach, given that they already owned 46 per cent of the company and that some of the Capital Bars outlets were leased from the brothers.

The possible offer at a maximum of 21p sterling comes just two years after Capital Bars - then known as Break for the Border - rejected a 55p sterling offer from Mr Hugh O'Regan's Thomas Read Holdings in favour of a deal which saw the company buy six pubs and hotels from the O'Dwyers for £14.6 million in cash and shares.

The shares element of the deal left the O'Dwyers with a 46 per cent stake in Capital Bars and Mr Liam O'Dwyer took over as chief executive of the group.

But since then, Capital Bars has suffered from weak trading although volume sales rose steadily.

The company blamed a variety of factors for the poor trading which led to a profits warning last June.

These included high rents and wages, Government-imposed price freezes, poor public transport, taxi strikes and the foot-and-mouth crisis. Pre-tax profit in the half-year to the end of April was just €490,000 on turnover of €21.5 million.

That poor trading has had a devastating effect on Capital Bars' share price, which has fallen from a high of 50p sterling two years ago to a recent low of 9p.

The statement about the management approach was triggered by a 4 1/2p rise in the share price last Friday to 13 1/2p.

The shares did not trade yesterday after the confirmation of the management approach but dealers said that they were at a bid-offer mid-point of 18p sterling, 3p below the indicated maximum offer price.

Capital Bars' stable of theme bars and superpubs includes some of Dublin's trendiest night spots such as Break for the Border, Fireworks, Bob's Bar, Coyote, Major Toms, Zanzibar, Sosueme and the George bar.

It also includes Cafe en Seine, which is currently being redeveloped, and the former Planet Hollywood operation. It also owns the Trinity Capital, the Grafton Capital and the Rathmines Capital hotels.