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Delaware North eyeing Centerplate?

BUFFALO N.Y. Delaware North Cos., a contract company specializing in sports and entertainment foodservice, said it was "actively" seeking an acquisition, but would neither confirm nor deny speculation that it had its sights set on struggling competitor Centerplate Inc.

Delaware North officials said in a statement that the company was "actively looking for potential acquisition candidates" that would help the company grow domestically and internationally, and that it was seeking companies "in complimentary [sic] industries."

Delaware North added in the statement that it would not comment on specific acquisition targets.

However, an industry insider who requested anonymity said he had heard for months that Delaware North “was the leading candidate” to purchase rival Centerplate, which recently lost such key clients as Major League Baseball’s New York Yankees and Minnesota Twins. Delaware North picked up the contract for the Twins, and the Yankees decided to self-operate the foodservice at its new stadium, which opens next year.

After losing the baseball contracts, the publicly traded Centerplate announced in May that it had retained UBS Securities as a financial adviser while it considered a sale or other changes to its capital structure. At that time, Centerplate officials said the company might solicit a buyout by a private-equity firm, among other options.

On Friday, Gael Doar, a spokeswoman for Centerplate, denied speculation about a Delaware North buyout, saying: “We don’t comment on rumors and as far as I’m concerned that is a rumor.

"We’ve announced we hired UBS [Securities] to assist in evaluating capital structure alternatives and beyond that we’ve not made any other announcement,” she said.

In trading on Friday, Centerplate's stock surged nearly 50 percent to close at $3.65 a share. Its market cap totaled $76.6 million, and debt, as of April 2008, was $280.9 million. Enterprise value, as calculated on Yahoo Finance, was $290.9 million.

According to data compiled for the 2008 edition of Nation’s Restaurant News’ Top 100 company census, Centerplate’s estimated U.S. foodservice sales last year were $709.6 million, and Delaware North reported annual U.S. food and beverage revenues of $763.1 million.

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