Commenting on the Restaurant Group rights issue and the acquisition of Wagamama, Martin Cholwill, senior fund manager, UK equities at Royal London Asset Management, said:
Restaurant group deal should earn high return
“We believe the Restaurant Group are paying a fair price for an excellent asset, and are well placed to generate cost and revenue synergies which should earn them a high return on investment.
“The Restaurant Group would allow Wagamama to retain its management and culture and continue to operate under a reasonable level of autonomy, much like the pubs and concessions they currently own. The Wagamama brand attracts a broad demographic of customers and the type of food they offer has seen a growing demand. Additionally, they could roll out Wagamama into airports, where they are currently significantly under represented.
“We conclude that this transaction would bring a number of new opportunities to Restaurant Group, and therefore are supportive of the deal.”
RLAM holds 11.4m shares in the Restaurant Group, 5.7% of the company worth approximately £25.9m.
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About Royal London Asset Management (RLAM):
Established in 1988, Royal London Asset Management (RLAM) is one of the UK's leading fund management companies, providing investment management solutions to both wholesale and institutional clients such as not-for-profit organisations, local authorities and the insurance sector.
RLAM manages £117 billion of assets and employs 89 investment professionals. It invests in all major asset classes including UK and overseas equities, government bonds, investment grade and high yield corporate bonds, property and cash.
For professional clients only, not suitable for retail investors.
Issued September 2018 by Royal London Asset Management Limited, registered in England and Wales number 2244297; authorised and regulated by the Financial Conduct Authority. Registered Office: 55 Gracechurch Street, London, EC3V 0RL.