Restaurant Group

Ticker RTN

Today's data summary

Market open
% change
Price Pence
As of 13:48 16 Jan 2019
Market cap. Pound sterling
303.41 million
As of 13:48 16 Jan 2019

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Restaurant Group shares slip

Wagamama chain
Getty Images

Shares in the Restaurant Group, the owners of the Frankie & Benny and Garfunkel's chains, are down almost 2%.

The drop - which is deeper than that of the wider market - comes after the firm said it had secured the backing of 92% of shareholders for its £315m rights issue to fund its takeover of Asian chain Wagamama.

Those shareholders who refused to buy the new shares will have their stake in the company diluted.

Wagamama's high price

BBC Radio 4


Wagamama restaurant
Getty Images

Restaurant Group's £550m takeover of Wagamama didn't get the fulsome support directors may have hoped. Only about 60% of the votes cast were in favour of the tie-up.

Emily Waterworth, assistant director Brewin Dolphin, says the majority of takeovers get about a 97% backing, "so it wasn't exactly a massive vote of confidence from the shareholders," she tells Today.

She says the deal's valuation makes it the highest price per-restaurant every paid in the UK. The worry is that the existing owners have squeezed out costs and taken their "pound of flesh".

"It's hard to see that there can be significant cost improvements made. The synergies being proposed by Restaurant Group are fairly ambitious."

Restaurant Group to raise £315m for Wagamama deal

Wagamama restaurant
Getty Images

The Restaurant Group (TRG), the owners of the Frankie & Benny and Garfunkel's restaurant chains, has launched a rights issue to raise £315m in order to help fund its takeover of the Wagamama chain.

The takeover, which was announced last month, values Wagamama at £559m.

Announcing the rights issue, TRG chief executive Andy McCue said: "This a transformative deal which accelerates our growth strategy and adds a differentiated, high growth brand to our portfolio."