Chez Gerard: £15.5m formal bid.

In October 2002, Paramount offered five of its own shares for each Chez Gerard share and a cash alternative of £20.6m.

The group said it had reduced its offer after investigations into Chez Gerard identified a shortfall in projected cash flow that was significantly below its expectations.

If the bid is successful, Paramount will appoint Nick Basing, who has previously worked for the Rank Group and Granada, chief executive of the group. Ian Neill, chief executive of noodle restaurant chain Wagamama, will become a non-executive director.

Basing’s job as chief executive would be to improve cash flow at the company by increasing restaurant profitability, reducing support office costs, selling some restaurants, and rebranding others.

Paramount chairman Guy Naggar said: “Under the new management team, we believe that the business of Chez Gerard can realise their significant potential.”

The company, which is sitting on a cash pile of about £4m, already has a 3.2% stake in Chez Gerard and said it had sufficient support to take its holding to more than 50%.

Chez Gerard said it was considering the offer and would make a further announcement in due course.