Hedge fund Oasis takes 5% stake in The Restaurant Group
Hong Kong-based fund could shake up owner of Wagamama and Frankie & Benny’s chains
Hong Kong-based activist hedge fund Oasis Management has taken a 5 per cent stake in Wagamama-owner The Restaurant Group in a move that could lead to an overhaul of the casual dining and pub operator.
Oasis came to prominence in the UK after it bought up nearly a fifth of the shares of British manufacturer Premier Foods and led an activist rebellion to remove the Mr Kipling-cakemaker’s longtime chief executive.
Oasis bought its stake in The Restaurant Group, which owns 423 venues across the UK including the Chiquito and Frankie & Benny’s chains, in late November last year, according to a company filing.
The Restaurant Group has bounced back from the lows of the coronavirus pandemic, when it was forced to shut 125 of its worst-performing venues. The group reported sales in the six months to July last year of £423mn, almost double the group’s half-year sales in 2021.
But, as with much of the hospitality industry, the group has been weighed down by soaring energy, labour and food and drink costs, alongside exposure to rising interest rates.
Investors also fear that the cost of living crisis could precipitate a downturn in the hospitality sector. The London-listed group’s share price has fallen about 65 per cent over the past year, to 35p. In December, The Restaurant Group’s lenders agreed a £340mn funding package for the business.
Chief executive, who previously led HBOS through its near-collapse during the 2008 financial crisis, said the company was making “good progress” and “decisive management actions”, including hedging energy costs, had limited cost pressures.
The Restaurant Group declined to comment. A representative for Oasis did not immediately respond to a request for comment.
Founded in 2002 by Seth Fischer, a former portfolio manager in Asia for JPMorgan Chase’s Highbridge Capital, Oasis makes the majority of its investments in Asia.
In 2017, the Hong Kong-based hedge fund was invited on to the board of Premier Foods after becoming its second-biggest investor.
At the annual meeting the following year, Oasis alongside US hedge fund Paulson & Co, pushed for the group’s CEO Gavin Darby to be removed after five years in the job, accusing him of “persistent value destruction”.
Despite fending off the activists, Darby stepped down shortly afterwards. In July last year, Daniel Wosner of Oasis left the Premier board after the fund reduced its position.