European Leisure has seen more in its short life - barely a decade - than most publicly-quoted groups in their entire lifespans. It is now about to be zapped. The group which originated from the former quoted Edenderry Shoe company has seen it all. This has encompassed the colourful Mr Michael Quadrini, a former director. He liked jewellery: "gold diamonds, anything that's the real thing. I wear a gold toothpick around my neck, not for any sentimental reason but because it's useful." The Newcastle Chronicle was told that he had a second home in which the waste pipes in the gents' toilet were goldplated. But Mr Quadrini was involved in a bitter boardroom row, the first of many rows involving other directors, following his refusal to hand over company files.

Then there was a major restructuring involving banks converting loans to equity. They ended up with a majority of the company but the deal has paid off handsomely for them. European Leisure had a visit from the Serious Fraud Office. And last, but not least, Mr Michael Ward, a former managing director, was found guilty in London of masterminding a carefully-crafted fraud involving the company's shares.

The group is now about to lose its identity and share quotation. The proposed merger deal with Allied Leisure which values its shares at a 45.9 per cent premium to the pre-merger talks price is likely to be accepted. And as Allied Leisure, whose shares are quoted only in London, is the vehicle used to effect the takeover, European Leisure's share quotation will disappear. Also, Allied does not intend to seek a share quotation in Dublin. European Leisure will be no more.

However, around one quarter of European Leisure's 5,000 shareholders are Irish. They are being offered 361 new Allied shares for every 100 European Leisure shares and now have the option to be shareholders in the enlarged grouping; it will be 52 per cent controlled by the European Leisure shareholders. Some of the institutional shareholders have been putting pressure on the British leisure companies to merge as that industry is too fragmented and is badly in need of rationalisation. Also, institutional shareholders have been shying away from the second-liners. However, even with this get-together, the enlarged company, capitalised at some €102 million (£68 million sterling), will still be considered too small. What is surprising about last week's announcement of the agreed merger was the deafening silence about a third company, Waterfall Holdings. European bought an 18.5 per cent stake in this publicly quoted rival snooker club in Britain and this was seen as a prelude to a takeover.

Industry sources say Waterfall would be happier without this stakeholder. Waterfall Holdings was set up in 1993 by Mr Martin Callan, a former senior executive of First Leisure, who has a 10 per cent stake. Talking to The Irish Times about the stake, he said: "it is not their right . . . we have to have time to digest the news". Tellingly he went on to say: "Waterfall is very strong . . . we are doing very well and not seeking to be taken out".

However, it is the institutions who will eventually call the tune. And the merger of European Leisure and Allied is seen as just the first step. "The merger will be an important first step in creating a sizeable leisure group with national presence across a range of leisure activities" is how Mr Victor Steel, the proposed chairman of the merged group, described it. "The merged group will also have the strength of cash flows and the institutional shareholder base to take advantage of further consolidation in the leisure sector."

The two are a very good fit. Allied operates 56 family entertainment centres and fast-food restaurants; 10-pin Megabowl outlets and a Burger King franchise network. Following the sale of its amusement manufacturer, European Leisure has been left with 70 American pool and snooker clubs across Britain. The enlarged group already sees a £1 million (€1.5 million) cut in central costs per annum. And that does not take rationalisation benefits into account. If the new, revitalised group can convince institutional investors that it has the capacity to rationalise the industry, then its share rating would be enhanced. That, in turn, would allow it to acquire companies more cheaply. But its Irish link will have been severed.