- TRG told investors there was “no certainty” that Wheel Topco would make an offer
- Pizza Express is chaired by Allan Leighton, a former chairman of Wagamama
- Two weeks ago, Apollo agreed to a deal valuing TRG at around £701m
A takeover battle for Wagamama’s parent company could be on the horizon after the owner of Pizza Express expressed interest.
The Restaurant Group acknowledged that it had received a request for “diligence information” from Wheel Topco, the company behind the fake Italian dining chain, so that it could assess a potential bid.
It told investors there was “no certainty” that Wheel Topco would make an offer and advised them “to take no action at this time in relation to the request for information received.”
New approach: The Restaurant Group acknowledged that it had received a request for “diligence information” from Wheel Topco, the company behind the Pizza Express restaurant chain
Pizza Express is chaired by Allan Leighton, who led the board of Japanese-inspired chain Wagamama and led its £559 million sale to TRG in 2018.
Sky News initially reported this Wednesday evening that the casual dining brand was considering an approach for TRG, which also operates Brunning & Price’s pub business.
It comes a fortnight after TRG agreed to be acquired by private equity giant Apollo Global Management in a deal that values the entire business at around £701 million.
Apollo said its offer would ensure the hospitality group has the necessary capital and “the benefit of a long-term investment approach” to help further expansion.
Alex van Hoek, a partner in its private equity business, said the injection of new funds was particularly important given the prospects of high inflation and interest rates, even though TRG had “proven resilient” across different economic cycles.
TRG recovered earlier this year to a first-half profit of £2.3m thanks to lower impairment charges and increased trading at its Wagamama and airport facilities.
Yet, like other mid-market hospitality companies, it is struggling with declining consumer demand and higher food, energy and labor costs.
It has also received significant backlash from some investors over its disastrous share price performance, four years of straight losses and chief executive Andy Hornby’s pay packages.
At least four activist investors, including hedge fund Oasis and New York-based Irenic Capital, have tried to break up the company’s operations.
Last month, TRG agreed to offload its loss-making leisure business, home to the Chiquito and Frankie & Benny’s brands, to Cafe Rouge owner Big Table Group for £7.5m.
Shortly before that, Ken Hanna declared he would not stand for re-election at the company’s upcoming annual general meeting in January, following pressure to resign.
The shares of the Restaurant Group were 1.8 percent higher at 67.7 pence early Thursday afternoon, but have fallen by around 88 percent since their peak in 2015.