Eagle Boys 'deal' close to delivery

By KARYN SCHERER

An established player in the fast-food industry is believed to have approached the Eagle Boys pizza chain about a takeover, in a move competitors fear could spark a fierce price war.

While the company's Australian owners have denied any such move is imminent, New Zealand franchisees are expecting to be told this week whether the deal is going ahead.

Rumours have swept the industry that the mystery suitor is Pizza Hut, which is owned in this country by publicly listed Restaurant Brands.

Speculation has also centred on American pizza chains Papa John's and Little Caesars.

Papa John's is the fourth-largest pizza chain in the US and a bitter rival of Pizza Hut. When the company recently launched an ad campaign with the slogan "Better ingredients, better pizza," Pizza Hut took it to court and won.

Across the Tasman, intense competition among the big players - Eagle Boys, Domino's, Pizza Hut and Pizza Haven - has driven down prices to as low as $A3.95 ($4.72) for a large pickup pizza.

The only chain that does not also operate here is Domino's. Its franchise development manager, Peter Bischa, said the chain intended to move into New Zealand within two years.

He said Domino's was not interested in taking over Eagle Boys, but was concerned that a new player might drive down prices even further.

"It will be another pizza war, which is what we have on a regular basis every few years."

Restaurant Brands chief executive Jim Collier acknowledged that the company had looked at "lots of different companies" over the past year, but denied that a deal had been struck.

"There is not a lot of substance to it right now, and the reason is it is a pretty hard business to buy," he said.

"You have not only got to buy 50 independent franchise outlets, you have also got to convince the Australian owners to sell their New Zealand operation. I think that would be quite hard to do."

The Queensland-based founder of Eagle Boys, Tom Potter, agreed with that assessment, describing suggestions that it was considering a deal as "total rubbish." He refused to comment further.

The chain's New Zealand managing director, Gavin Cook, said yesterday that he was unable to comment at this stage.

A former area manager for Pizza Hut, Mr Cook decided to strike out on his own 14 years ago, setting up a single store in Christchurch called Stallone's.

That grew into a 16-store chain before changing its name to Eagle Boys four years ago. With help from the Australian company, it has since tripled in size.

The pizza market in New Zealand is believed to be worth nearly $100 million a year. Pizza Hut has 43 stores, Pizza Haven 39 and Eagle Boys about 50.