Investor calls for Wagamama owner to tackle ‘ruinous’ share price performance

An activist investor has called on Wagamama owner the Restaurant Group (TRG) to be more transparent with shareholders about plans to turn around its “ruinous and devastating” share price performance.

 

Oasis Capital Management, a hedge fund which owns a 6.5% stake in TRG, has issued a second stinging rebuke to the board of the casual dining business.

 

In an open letter published last week Oasis had called for greater clarity from TRG’s board over how the company is being run.

 

Shares in TRG, which owns over 400 UK restaurants and is also behind the Frankie & Benny’s and Chiquito brands, fell by two-thirds over the past year.

 

TRG said in its response that its operational performance had been strong since the ending of coronavirus restrictions and confirmed it was reviewing its strategic options.

 

It added that Oasis had requested a seat on the board during a meeting in December 2022, but this had been denied.

 

In a statement released on Tuesday (21 February) Oasis welcomed the strategic review but criticised the lack of detail on its scope and process.

 

“The board has made no prior attempt to publicly communicate any details of the scope or process of this review to shareholders – let alone engage with them on it,” Oasis said.

 

The hedge fund also criticised TRG for not disclosing any trading information on its performance since its interim results were published in September 2022.

 

This made it “impossible for shareholders and the market to assess how any or all of its segments are performing…thus, unsurprisingly, TRG is assigned a low valuation rating”, Oasis said.

 

It added that shareholders “unfortunate enough” to participate in TRG’s three equity capital raises over the past five years had seen the value of their investment “collapse by c.70% since 2018”.

 

Oasis said: “Longer-term shareholders have suffered even worse, losing a staggering c.93% since the 2015 peak, whilst currently receiving no dividends, buybacks or capital appreciation.”

 

The hedge fund said the board’s “refusal to acknowledge” the scale of the company’s losses showed the need for more accountability at board level.

 

Oasis said it wanted to “cooperate constructively” with the board but warned more of the “devastating” share price performance was “not an option”.

 

In an update to investors TRG said it had provided a “full response” to Oasis on 16 February.

 

“Our next announcement will be the full-year results on 8 March 2023 and we look forward to updating our shareholders then,” the company said.

 

TRG bought Wagamama for an estimated £559m in 2018.

 

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