Costa Coffee to bid £32m for coffee bars in East Europe

Costa Coffee owner Whitbread was tonight poised to launch a £32million bid for Coffeeheaven after months of speculation about a tie-up.

The firms said they were in "advanced talks" over an offer of 24p per share as Whitbread looks to expand its coffee empire overseas.

Shares in AIM-listed Coffeeheaven jumped more than 11% or 2¼p to 22p today, having crashed from above 40p 18 months ago to only 10p this year.

Analysts have been expecting a bid ever since Coffeeheaven - which runs about 90 coffee bars in central Europe - launched a strategic review in June.

It was hoped that the bid would come in at around 40p a share.

Most of Coffeeheaven's bars are in Poland, where Costa has a handful of stores, although it also operates in the Czech Republic, Slovakia, Bulgaria, Hungary and Latvia.

A successful bid of 24p a share would net non-executive director and major investor Bill Currie more than £3.7 million for his 15.5million shares.

Currie was ranked as the City's number one food retailing analyst when he was at BZW and Hoare Govett and now runs his own investment fund - Liverpool-based William Currie Investments.

Coffeeheaven founder and chairman Richard Worthington would get £275,000 for his stake in the firm. He would get another £300,000 for options he has in the firm.

Costa Coffee has so far had a good recession as has another Whitbread group - the Premier Inn hotel chain.