The Restaurant Group – which owns brands including Wagamama – is being taken over by a private equity giant in a £700m deal.
Apollo is set to pay 65p a share for the company, reflecting a 34% premium on its share price as of Wednesday’s close.
TRG’s stock jumped 37% to 66p after news of the takeover emerged – its highest percentage gain since April 2020.
As well as the chain of Asian noodle restaurants, TRG owns Brunning & Price pubs as well as food concessions at airports – with a total of about 380 sites nationwide.
Last month, TRG confirmed it was selling off loss-making chains Frankie & Benny’s and Chiquito to Big Table Group, which owns Café Rouge, Bella Italia, Las Iguanas and Banana Tree.
News about that deal was first reported by Sky’s City editor Mark Kleinman.
Big Table is paying a nominal £1 for 75 restaurants, and will also receive a £7.5m “contribution” from TRG, with the sale set to be completed on 30 October.
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Apollo said it had “closely followed” TRG over many years.
Alex van Hoek, a partner in its private equity business, added: “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.”
Retail expert Greg Johnson, from Shore Capital, argued that TRG’s sale price was too low and doesn’t reflect the quality of its estate.
The casual dining sector as a whole has been hurt by soaring inflation and pressure on consumer spending.
