Wagamama’s Hedge Fund Spat Is Poised to Escalate
Underwhelming results by the noodle chain’s parent are bound to leave activist shareholders pounding the table for changes.
Waiter! When you've been waiting all night for your food and the staff finally bring you the wrong dish, you're going to complain. If it happens repeatedly and you happen to own the restaurant, you might think about replacing the manager. Full-year results delivered by Wagamama owner Restaurant Group Plc aren't what its second-largest shareholder ordered. The company's spat with Hong Kong-based hedge fund Oasis Management Co. now looks almost certain to escalate.
The market has already delivered its verdict, driving TRG shares down as much as 18% in early trading Wednesday for what would be their biggest decline in 18 months. The company reported slowing like-for-like sales growth at the Asian noodle chain and took a £117.5 million ($139 million) charge at its leisure division, which includes the Frankie & Bennys chain of American-Italian restaurants, where sales are falling. That helped to push the company to an operating loss of £49.7 million, from a profit of £11.8 million a year earlier.