The Restaurant Group shareholders have approved its purchase of Wagamama with about 60% voting in favour at a meeting this morning.
The owner of Garfunkel’s, Frankie & Benny’s and Chiquito will purchase 133-site Wagamama in a deal that values the company at £559m.
Approval comes despite many shareholders being said to have been shocked by the price tag, which is more than 13 times the group’s EBITDA.
Debbie Hewitt MBE, chairman of The Restaurant Group said: “We have engaged extensively with investors throughout this transaction and very much appreciate the time all have given. We are pleased that the majority of our shareholders have approved the acquisition and the associated rights issue, and we would like to thank them for the support they have shown. We are confident that the deal will create significant long-term value.
“The acquisition of Wagamama creates a raft of new opportunities for us to capitalise on in the months and years ahead. We look forward to welcoming the Wagamama team into the business post-completion and thank them alongside all of our Restaurant Group colleagues for keeping focused on delivering for our customers.”
The proposal will see The Restaurant Group pay £357m in cash, as well as assuming Wagamama’s debt. The Restaurant Group is planning to raise £315m through the issue of 290 million new shares to fund the acquisition, with existing shareholders offered 13 new for nine old shares based at 108.5p.
The Restaurant Group said a number of its existing sites would be converted to Wagamama restaurants accelerating its UK roll-out. The new owner will also look to expand its concessions and delivery presence as well as exploring international options.
Wagamama, founded by Alan Yau in 1992, is owned by private equity firms Duke Street and Hutton Collins.