Investors Oppose Restaurant Group's Purchase Of Wagamama
Two shareholders of Restaurant Group Plc have called on the company to cancel its proposed £357 million deal to buy the Wagamama noodle chain.
Shareholders GrizzlyRock Capital and Vivaldi Asset Management, which manage investment funds that jointly own 1.9% of Restaurant Group, said the company had not considered risks related to executing the deal.
Restaurant Group, most of whose restaurants and gastropubs focus on American, TexMex and traditional British cuisine, had announced a deal last month to buy Wagamama to expand its chain of pubs and airport and shopping mall eateries.
The £315 million rights issue, proceeds of which were planned to partly fund the acquisition, was announced at a 57% discount.
"This [rights issue] amount, both in absolute size and especially percentage of the current market capitalisation, is far too large," GrizzlyRock and Vivaldi jointly said in a statement.
Restaurant Group did not immediately respond to Reuters request for a comment.