​Will Pizza Express Owner Outbid Apollo? Inside the Tense Takeover Struggle for Wagamama's TRG

​Will Pizza Express Owner Outbid Apollo? Inside the Tense Takeover Struggle for Wagamama's TRG

Posted by Emily on 26th Oct 2023

The owner of Pizza Express, Wheel Topco, is potentially setting its sights on a takeover bid for Wagamama, currently under the umbrella of The Restaurant Group (TRG).

Wagamama Boston Stephen Shaw at English Wikipedia, CC BY 3.0, via Wikimedia Commons

TRG has informed its shareholders of a possible new bidder on the horizon, Wheel Topco, which could ignite a bidding contest with Apollo Global Management. Wheel Topco, also the governing entity of Pizza Express, is currently seeking due diligence data regarding TRG, contemplating a counter-proposal to match Apollo's standing bid of £700 million.

Earlier this month, TRG's board — custodians of the Wagamama franchise - endorsed the acceptance of Apollo's offer, amounting to 65p per share. However, with the emerging interest from Wheel Topco, TRG's executives have committed to judiciously evaluating any competing proposal.

The offer tabled by Apollo encapsulates a 67 per cent premium on the average year-long share price preceding the bid, which was 39p, and 34 per cent above the closing price just before the disclosure of the bid. This development, paired with news of Wheel Topco's potential bid, nudged TRG's share price upwards by 2.22 per cent, equating to an increase of 1.47p, settling at 67.97p.

Pizza Express, Derby Dave.Dunford, CC BY-SA 4.0, via Wikimedia Commons

Encompassing roughly 380 restaurants and pubs, a concessions operation, and approximately 60 international franchises, TRG also claims a 20 per cent interest in a collaborative venture managing seven Wagamama outlets in the United States.

The group, a significant player in the hospitality sector, has faced considerable strain from activist investors. These stakeholders successfully persuaded the board to divest its unprofitable leisure segment to Big Table Group for £7.5 million. Two activist shareholders, Oasis Management Company and Irenic Capital, have expressed support for Apollo's bid for TRG.

In an official statement, TRG clarified: "There has been no concrete indicative offer, neither written nor verbal, regarding a potential bid, including specifics related to terms, price, or form of consideration, from Wheel Topco to TRG's board. Should Wheel Topco formalise a proposal, TRG's board, in alignment with its advisers, will meticulously scrutinise the specifics. It remains uncertain whether Wheel Topco will proceed with a bid for the company, and if so, the particulars of the offer remain undetermined."

Main Image Source Chrisloader, CC BY-SA 3.0, via Wikimedia Commons