A takeover battle for Wagamama’s parent company could be on the horizon after Pizza Express’s owner expressed an interest.
The Restaurant Group acknowledged that it had received a request for ‘diligence information’ from Wheel Topco, the firm behind the mock-Italian dining chain, so that it could assess a potential offer.
It told investors there was ‘no certainty’ of Wheel Topco putting forward an offer and has advised them to ‘take no action at this time with regard to the information request received’.
New approach: The Restaurant Group acknowledged that it had received a request for ‘diligence information’ from Wheel Topco, the firm behind dining chain Pizza Express
Pizza Express is chaired by Allan Leighton, who led the board of Japanese-inspired chain Wagamama and spearheaded its £559million sale to TRG in 2018.
Sky News initially reported on Wednesday night that the casual dining brand was considering an approach for TRG, which also operates the Brunning & Price pubs business.
It comes a fortnight after TRG agreed to be acquired by private equity giant Apollo Global Management in a deal valuing the overall business at around £701million.
Apollo said its bid would ensure the hospitality group has the necessary capital and the ‘benefit of a long-term investment approach’ to help further expansion.
Alex van Hoek, a partner in its private equity business, said the injection of new funds was particularly important given the outlook of high inflation and interest rates, even though TRG had ‘proven resilient’ across different economic cycles.
TRG recovered to a first-half profit of £2.3million earlier this year thanks to lower impairment charges and increasing trade at its Wagamama and airport outlets.
Yet, like other mid-market hospitality businesses, it has grappled with softening consumer demand and elevated food, energy and labour costs.
It has also received considerable backlash from some investors over its disastrous share price performance, four years of consecutive losses, and the pay packages of chief executive Andy Hornby.
At least four activist investors, including hedge fund Oasis and New York-based Irenic Capital, have sought to split up the company’s operations.
Last month, TRG agreed to offload its loss-making leisure business, home to the Chiquito and Frankie & Benny’s brands, to Cafe Rouge owner Big Table Group for £7.5million.
Just before that, Ken Hanna declared he would not seek re-election at the firm’s upcoming annual general meeting in January following pressure to stand down.
The Restaurant Group shares were 1.8 per cent higher at 67.7p on early Thursday afternoon, but have slumped by approximately 88 per cent since their 2015 peak.
