Private equity group snaps up Wagamama owner for £506m

The Restaurant Group (TRG) and Apollo Global Management (AGM) have entered into an agreement for the US private equity giant to buy the casual dining business for £506m.

The deal suggests an enterprise value of £701m for TRG, which incorporates Wagamama and the Brunning & Price pub chain, with Apollo agreeing to pay shareholders 65p per share in cash.

The board has unanimously recommended the deal, which will take the business private, is given the green light by shareholders.

Only last month TRG announced a strategy to offload its leisure business arm, paying the Big Table Group £7.5m to take its Chiquito's and Frankie & Benny's brands off its hands.

Big Table Group agreed to pay a token £1 for the 75 loss-making sites, while TRG contributed £7.5m to the Big Table Group subject to certain conditions.

TRG chairman Ken Hanna, who is set to step down next year, said: “The TRG board and management of 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, 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.”

Alex van Hoek, a partner in AGM’s private equity business, added: “This investment aligns with our strategy of backing industry leading companies to drive profitable growth over the long-term.

"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.

"We look forward to working with the management team and investing in TRG to accelerate its long-term strategy, leveraging our significant industry experience.”

TRG had faced months of pressure from activist shareholders over its performance ahead of the sale of the Chiquito's and Frankie & Benny's brands. In July it had said it was working with independent advisers to assess its "strategic options" for the future.

The deal will need to achieve support from 75% of shareholders and is expected to complete in early 2024.