The Restaurant Group saw its share price sink to an eight-year low yesterday – but management got the result they wanted after its proposed £559m takeover of Wagamama was voted through.
Several major investors had raised objections to the deal, arguing that the price was too high and the group should be focusing on improving its existing business instead.
The firm, which owns chains such as Frankie & Benny’s and Chiquito, revealed that just over 60% of the votes cast were in favour of the acquisition, which will see it gain more than 200 restaurants worldwide.
Debbie Hewitt, chairman of The Restaurant Group, said the company had “engaged extensively” with investors throughout the transaction.
“We are pleased that the majority of our shareholders have approved the acquisition and the associated rights issue, and we would like to thank them for the support they have shown. We are confident that the deal will create significant long-term value.
“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.”
Mrs Hewitt and her colleagues say that taking over Wagamama will give it access to a differentiated restaurant proposition that is aligned to structural growth trends.
Wagamama has a strong competitive advantage as the only UK pan-Asian brand concept with scale, having more than three times the sales of the next largest branded UK operator in Asian cuisine, a category that is fast growing and fragmented.
TRG believes that the Wagamama brand is well-positioned to benefit from a number of consumer trends, including the increased focus on healthy options, high interest in Asian food, and the consumer demand for speedy service and convenience through delivery.
Wagamama opened its first restaurant in London in 1992 and has achieved more than 25 years of continued estate expansion to 196 directly-operated and franchised restaurants.
TRG believes there is headroom to grow the size of Wagamama’s UK estate by approximately 40 to 60 additional restaurants without saturation.