Restaurant Group to buy Wagamama for £559m

Columbia Threadneedle Investments, which owns 7.7 per cent of Restaurant Group said it cannot support the proposed takeover of Asian themes casual dining group Wagamama,  because of the high valuation and the economic backdrop.

The Restaurant Group, who owns Frankie & Benny’s and Chiquito uinveiled what CEO Andy McCue called a “ Transformational” acquisition of Wagamama. Although The Restaurant group’s core brands have struggled in recent years said it would buy Wagamama from private equity groups Duke Street and Hutton Collins for £559m including debt.

The price was justified by the chain’s growth rate and by the cost savings made by combining Wagamama with its own operations.

The proposed acquisition will be voted on at a general meeting on November 28, and will be funded by a discounted £315m rights issue. Restaurant Group shares have fallen by about a quarter from levels just before the deal was announced.