28th Nov 2018 11:54
LONDON (Alliance News) - Restaurant Group PLC said its shareholders voted Wednesday in favour of its GBP357 million acquisition of the Wagamama restaurant chain.
Restaurant Group shares were trading down 13% at 205.05 pence each.
Restaurant Group already owns brands such as Frankie & Benny's, Chiquito, and Garfunkel's.
At a meeting held earlier on Wednesday, just over 60% of the company's shareholders voted in favour of the acquisition of Mabel Topco Ltd, which owns the Asian food chain known for its communal tables, with 40% opposing the deal.
Noting the percentage of votes cast against, Restaurant Group said it will continue to "engage with investors to address their concerns".
Chairman Debbie Hewitt said: "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."
At the end of October, the Restaurant Group said it agreed to pay GBP357 million in cash for Wagamama, representing an enterprise value of GBP559 million when including debt.
To part-fund the deal, Restaurant Group is raising GBP315 million in a rights issue, as well as drawing on a GBP220 million facility from the Royal Bank of Canada.
The company will issue up to 290.4 million shares in the rights issue. Restaurant Group currently only has 201.1 million shares issued, so the rights issue shares will represent 59% of the company's enlarged share capital.
At the meeting, also just over 60% of shareholders approved the rights issue.
The new Restaurant Group shares are expected to be admitted to trading on Thursday.
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