Wagamama takeover approved despite hefty opposition
The Restaurant Group has received sufficient backing from shareholders.
The Restaurant Group has clinched approval for its controversial takeover of the Wagamama chain, despite a significant level of opposition from shareholders.
The full results showed just under 61% of shareholders supported the £559 million deal, which will be paid for through a combination of a £315 million rights issue and a £220 million revolving credit facility.
With almost two fifths of voters opposing the deal, The Restaurant Group said it would engage with investors to address their concerns.
Chairman Debbie Hewitt said: “The acquisition of Wagamama creates a raft of new opportunities for us to capitalise on in the months and years ahead. We look forward to welcoming the Wagamama team into the business post-completion and thank them alongside all of our Restaurant Group colleagues for keeping focused on delivering for our customers.”
Major Restaurant Group investors including Columbia Threadneedle and US activists GrizzlyRock Capital and Vivaldi Asset Management have publicly voiced opposition to the acquisition in recent weeks, saying it had “red flags”.
But shareholder advisory groups and other top shareholders such as JO Hambro have hit back with their own support.
Shares in the Restaurant Group were down 10% following the announcement.
Wagamama, which boasts 133 UK outlets, is being sold by private equity firms Duke Street and Hutton Collins.
It was founded in 1992 by restaurateur Alan Yau, who went on to establish the Michelin-starred Hakkasan.
In recent years it has defied the troubles hitting the casual dining sector to report sales and profit growth.
Its most recent quarterly figures show 8.5% like-for-like growth in the UK.
The Restaurant Group, meanwhile, has struggled to maintain sales at its portfolio of casual dining brands including Frankie & Benny’s, Chiquito and Garfunkel’s.
Like-for-like sales were down 3.7% in the six months to July 1, with total revenue falling 2.1% to £326.1 million.
The Restaurant Group has said it will accelerate expansion of Wagamama by converting some of its existing sites to the brand.