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| Frankie & Benny's owner to buy Wagamama despite investor fears | Frankie & Benny's owner to buy Wagamama despite investor fears |
| (about 2 hours later) | |
| The Restaurant Group will go ahead with its £550m deal to buy Wagamama despite objections from several major investors. | The Restaurant Group will go ahead with its £550m deal to buy Wagamama despite objections from several major investors. |
| The firm, which owns chains including Frankie & Benny's and Garfunkel's, said just over 60% of the votes cast were in favour of the tie-up. | |
| Big-name shareholders had opposed the deal over concerns about price and debt levels for the Restaurant Group. | Big-name shareholders had opposed the deal over concerns about price and debt levels for the Restaurant Group. |
| Shares in the company sank 15% to 199.5p on Wednesday. | Shares in the company sank 15% to 199.5p on Wednesday. |
| Debbie Hewitt, chairman of the Restaurant Group, said it was pleased that the majority of shareholders had approved the acquisition and rights issue, which would create "significant long-term value". | Debbie Hewitt, chairman of the Restaurant Group, said it was pleased that the majority of shareholders had approved the acquisition and rights issue, which would create "significant long-term value". |
| She added: "The acquisition of Wagamama creates a raft of new opportunities for us to capitalise on in the months and years ahead." | She added: "The acquisition of Wagamama creates a raft of new opportunities for us to capitalise on in the months and years ahead." |
| The group, which also owns the Coast to Coast and Chiquitos chains, agreed to buy Wagamama in late October and wants to expand the chain. | The group, which also owns the Coast to Coast and Chiquitos chains, agreed to buy Wagamama in late October and wants to expand the chain. |
| It said Wagamama, which has more than 190 restaurants, has outperformed the UK's casual dining market despite a consumer spending slowdown that has forced some chains to close outlets. | It said Wagamama, which has more than 190 restaurants, has outperformed the UK's casual dining market despite a consumer spending slowdown that has forced some chains to close outlets. |
| But shareholders including Pensions and Investment Research Consultants (Pirc) and Columbia Threadneedle Investments had opposed the takeover. | But shareholders including Pensions and Investment Research Consultants (Pirc) and Columbia Threadneedle Investments had opposed the takeover. |
| They said the deal is too expensive given it values Wagamama at more than 13 times its enterprise value before interest and other costs. | They said the deal is too expensive given it values Wagamama at more than 13 times its enterprise value before interest and other costs. |
| What is Wagamama? | What is Wagamama? |
| Some also warned it could push the Restaurant Group's debt to risky levels. | Some also warned it could push the Restaurant Group's debt to risky levels. |
| It plans to pay £357m in cash and raise £315m in a deeply discounted rights issue. | It plans to pay £357m in cash and raise £315m in a deeply discounted rights issue. |
| On Tuesday, Pirc said the "risks and adverse implications for shareholders appear too great to overlook". | On Tuesday, Pirc said the "risks and adverse implications for shareholders appear too great to overlook". |
| Restaurant chains have struggled recently, with Byron, Jamie's Italian and Prezzo among those to have closed branches and shed staff. | Restaurant chains have struggled recently, with Byron, Jamie's Italian and Prezzo among those to have closed branches and shed staff. |
| Reasons for the downturn include higher raw material costs, partly due to the weaker pound since the Brexit vote, waning consumer spending power and higher business rates. | Reasons for the downturn include higher raw material costs, partly due to the weaker pound since the Brexit vote, waning consumer spending power and higher business rates. |
| However, the Restaurant Group has said Wagamama has a "strong competitive advantage" as it is three times the size of its nearest rival and is the only big pan-Asian brand concept with scale in the UK. The chain is owned by private equity firms Duke Street and Hutton Collins. | However, the Restaurant Group has said Wagamama has a "strong competitive advantage" as it is three times the size of its nearest rival and is the only big pan-Asian brand concept with scale in the UK. The chain is owned by private equity firms Duke Street and Hutton Collins. |
| About two thirds of Wagamama's directly-operated and franchised restaurants are in the UK, and its most-recent figures show same-store sales growth of 9.6%. | About two thirds of Wagamama's directly-operated and franchised restaurants are in the UK, and its most-recent figures show same-store sales growth of 9.6%. |
| Despite this, shares in The Restaurant Group have fallen close to 30% since the deal was first announced on 30 October. | Despite this, shares in The Restaurant Group have fallen close to 30% since the deal was first announced on 30 October. |