The group behind Wagamama is set to be taken private following an agreement with an investment vehicle owned by asset manager Apollo Global Management.
The Restaurant Group’s (TRG) board has recommended an offer of 65p a share to shareholders, valuing the group’s share capital at £506m with a total enterprise value of £701m.
The group has been listed on the London Stock Exchange since 1969.
According to a statement from TRG, Apollo has followed the group for many years and believes it is a “high quality and leading company in the casual dining market with an attractive portfolio of concepts and brands”.
It added that Apollo believes that TRG’s development will be best served under private ownership, with access to capital and the benefit of a long-term investment approach.
The TRG Board said it believes the value represented by the acquisition will provide a superior outcome for shareholders compared to the continuation of its independent strategy.
In September, TRG agreed the sale of its “loss making” leisure business, which includes the Frankie and Benny’s and Chiquito chains, to rival Big Table Group for £1.
The sale comprised the business’s 75 sites as well as its associated management and restaurant teams and is expected to complete in the fourth quarter of the 2023 financial year.
Ken Hanna, chair of TRG, said: “The TRG board and management of TRG have reviewed in detail the strategic options available to the group, resulting in the announcement of the proposed sale of the leisure business. The TRG board continues to have confidence in the plan, but is cognisant of the premium and the certain value of the Apollo offer against the backdrop of a challenging macro-economic environment. As such, the TRG Directors intend to unanimously recommend the offer to TRG shareholders.”
Alex van Hoek, a partner in Apollo’s private equity business, said: “This investment aligns with our strategy of backing industry leading companies to drive profitable growth over the long-term. TRG’s business has proven resilient through macroeconomic cycles but the outlook is still one of high interest rates and inflationary pressures and the company now needs the support of patient private capital, to achieve its ambitions.”