Wagamama owner to go private in £506m deal
The owner of about 400 restaurants and pubs across the UK has struggled with falling margins, which it attributed to soaring costs and slack recovery post-pandemic
The Restaurant Group, the operator that owns Wagamama, has agreed to be taken private by Apollo Global for £506m after a year of financial struggles and investor pressure.
The owner of about 400 restaurants and pubs across the UK has struggled with falling margins, which it attributed to soaring costs and slack recovery post-pandemic.
In recent months, the company had also been pressured by shareholders and activist investors Irenic Capital and Oasis Management to change management and improve profitability.
Both investors, who together own almost 20% stake in TRG, voted in favour of the restaurant group going private.
Under the terms of the deal as announced today (12 October), TRG shareholders will get 65p in cash for each share held. This means a premium of approximately 34% to the stock’s last closing price.
Chairman Ken Hanna agreed to step down last month, after the company forecast higher annual profits. TRG also agreed to sell its loss-making Frankie and Benny’s and Chiquito brands to Cafe Rouge owner Big Table Group, as part of efforts to bolster margins and cut debt.
In addition, the company’s board has unanimously recommended that shareholders vote in favour of the deal, which has an enterprise value of £701m and is expected to be complete in early 2024.
Prior to the deal, Apollo had put forth about three buyout proposals for the business.
According to Apollo Capital, the development of the company will be best served as a private business, with access to capital and the benefit of a long-term investment approach.
