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The Restaurant Group to pay £100,000 per site to offload struggling leisure division


The owner of Wagamama offers Big Table Group £7.5m to take over 75 sites, including the Chiquito and Frankie & Benny’s brands


By Sophie Witts


The Restaurant Group (TRG) is to pay its rival Big Table Group £7.5m to take its leisure business, primarily consisting of the Frankie & Benny’s and Chiquito brands, off its hands. The deal will see TRG pay the


casual dining group the equiva- lent of £100,000 for each of the 75 sites in the struggling division. In return, Big Table Group,


which operates over 160 restau- rants under brands including Bella Italia, Café Rouge, and Las Iguanas, will pay a token £1 for the loss-making sites. It follows months of tension between TRG and activist inves- tors unhappy with the direction of the business and perceived underperformance of its share price. TRG’s chairman Ken Hanna, who has come under fire from shareholders, announced last week he would step down in 2024 for personal reasons. TRG’s leisure business com-


prised 350 sites in 2019 but it has shut hundreds of locations since the onset of the pandemic. The division posted a statutory loss before tax of £65m for full- year 2022 and has been viewed as holding back progress at the wider business. TRG said the deal would


allow it to focus on its more suc- cessful Wagamama, pubs and concessions divisions. Around 3,000 staff which run


the leisure division restaurants will move across to Big Table Group as part of the deal, which is expected to complete by early Q4 2023. TRG chief executive Andy


Hornby said: “A sale of our leisure business significantly accelerates our medium-term strategic plans to increase adjusted warnings before interest, taxes, depreciation and amortisation margins and reduce leverage. “On behalf of TRG, I would like to express our massive


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Is the deal a good move for TRG?


Industry analysts share their initial opinions on the sale


Shorecap “We see the proposed transaction as a significant milestone for TRG, removing the drag (and distraction) from the leisure estate and allowing it to focus on the quality growth channels of Wagamama and Brunning & Price.”


thanks to the extraordinarily hardworking and dedicated teams across the leisure busi- ness who have made huge improvements in the customer proposition over the last few years. We wish them all well as part of the Big Table Group.” While many casual dining


chains have dramatically scaled down in size over the past two years, Big Table Group has focused on growing and reshap- ing its estate. In September 2022, it acquired the Banana Tree casual dining chain and has since expanded it from six to 15 locations by converting sev- eral of its existing restaurants, including Café Rouge sites.


Alan Morgan, chief execu-


tive at the Big Table Group, said: “Creating, developing and acquiring brands that comple- ment our existing portfolio whilst offering widespread con- sumer appeal is a fundamental part of our growth strategy. “This exciting acquisition


forms part of that strategy and we are delighted to be welcom- ing this new team into the Big Table Group.” The deal will leave TRG


with just over 300 restaurants under its Wagamama, Brun- ning & Price and concessions businesses.


sophie.witts@thecaterer.com 15 September 2023 | The Caterer | 5


Peel Hunt “The disposal of the division is also positive in our view as its performance was going backwards under the Frankie & Benny’s and Chiquito brands. These sites may do better under the Big Table’s brand portfolio.”


Numis “Overall, a sensible move which simplifies [TRG] and improves the balance sheet (removing a poison pill).”


Goodbody “Whilst the financial benefit of today’s announcement is limited, strategically it will enable management [at TRG] to focus its time on its remaining estate, which has shown a more robust performance.”


KERRYSWORLD AND TUPUNGATO/SHUTTERSTOCK


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