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The Restaurant Group share price surges after £506m takeover
The Restaurant Group (TRG), which operates approximately 400 restaurants in the UK, including Wagamama and Brunning & Price pubs, has accepted a £506 million takeover offer from US buyout group Apollo.
The group, which also operated Mexican food chain Chiquito and Frankie & Benny’s until offloading the loss-making business to The Big Table Group last month, will be taken private after accepting the half-a-billion pound offer from Apollo.
TRG chair Ken Hanna, who announced in September that he would be stepping down after pressure from activist investors, said: “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,” Hanna continued, “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.”
Apollo partner Alex van Hoek noted that TRG had “proven resilient through macroeconomic cycles” and the myriad of challenges the hospitality industry is facing, “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.”
Investors have responded positively to the takeover, loading up on TRG stock, causing the share price to leap by 37%.
TRG: Shares in The Restaurant Group leapt 37% in early trading after private equity firm Apollo agreed an offer to buy the UK casual dining group that would value it at £506mn.#FT #Wisealpha #corporatebonds pic.twitter.com/jlDYQV21K7
— WiseAlpha (@WiseAlphaTeam) October 13, 2023
The takeover deal is expected to be finalised early next year, subject to 75% investor approval – Irenic Capital and Oasis Management, its largest activie shareholders, have already backed the deal. If completed, TRG will be taken off the London Stock Exchange.