The Restaurant Group and Wagamama come to agreement for £559m deal

by XPRESS, 29 November 2018

The Restaurant Group’s (TRG) shareholders have approved the company’s £559m acquisition of Wagamama.

About 60% voted in favour of the deal at a meeting today (Wednesday, 28 November).

The deal will see TRG acquire the entire share capital of Mabel Topco – Wagamama’s holding company.

TRG will use a combination of cash, debt and a £315m fully underwritten rights issue to fund the acquisition.

TRG chief executive Andy McCue had called the deal an “exciting and transformative opportunity to create a business that can pursue a truly multi-pronged growth strategy and create substantial value for shareholders”.

However, the announcement received a mixed reaction from analysts and shareholders with several major TRG investors publically opposing the plan, leading to fears the deal could be rejected.

Having been approved, however, the deal is expected to complete on Friday, 21 December.

TRG has said it sees potential for a further 40 to 60 Wagamama sites in the UK and expects to convert at least 15 TRG sites to the Wagamama brand by December 2020.

Wagamama directly operates 138 sites in the UK and US and 58 franchise sites overseas.

The company saw UK like-for-like sales increase 8.5% in the first quarter of its new financial year.

Wagamama will be run as an autonomous division of the enlarged group.

Emma Woods, current Wagamama chief growth officer, will become Wagamama chief executive, reporting to McCue. Allan Leighton, current Wagamama chairman, will join the TRG board at completion of the deal as a non-executive director.

Article credit: Propel info