Shareholder calls for governance change at the Restaurant Group

A shareholder in the Restaurant Group (TRG) has said it should explore all options for governance change, accusing it of a “failure to deliver value to shareholders”.

Shares in TRG, which owns brands including Wagamama, Frankie & Benny's and Brunning & Price, lost about two thirds of their value in 2022.

In a public letter Oasis Management, which owns a 6.5% stake in the business through private funds, had claimed: “TRG has one of the worst performing share prices of any UK leisure company; materially worse than its closest peers, and disproportionately worse than what the impact of the challenging sector backdrop would alone justify.”

In a response issued to "give context to matters raised by Oasis", TRG, which is led by chief executive Andy Hornby, said it welcomed "constructive input from all shareholders that is supportive of the creation and delivery of long-term sustainable shareholder value".

The statement, published to the London Stock Exchange, said that while challenges facing the UK hospitality industry had been reflected in its share price, “swift and decisive management actions” had successfully guided the business through the pandemic.

It added that the operational performance of the group since the ending of Covid-19 restrictions had been strong when compared to the wider UK casual dining sector.

Oasis had called on the board to “realign its priorities” and take immediate steps to restore market confidence, accusing it of having “lost focus on long-term value creation and its alignment with the shareholder perspective”.

The hedge fund, which states its aim is to seek “enhanced collaboration with portfolio company boards where such an approach can unlock value for all stakeholders in the long-term”, said it had been forced to make its comments public after TRG’s board rejected its suggestions.

TRG said its chairman met Oasis face-to-face for the first time in December 2022 when it requested a seat on the board and asked for a strategic review to be conducted by an “independent bank”.

It said Oasis’ requests were both denied as the group was already reviewing its strategic options.

TRG operates about 410 restaurants and pub restaurants in the UK, the majority under the Wagamama, Frankie & Benny's and Brunning & Price brands. It also operates a multi-brand concessions business which trades principally in UK airports.

The group will announce its full-year results on 8 March.