Top Restaurant Group shareholder backs Wagamama deal to power shares

One of The Restaurant Group’s biggest investors believes shares can treble over the next five years thanks to its takeover of Wagamama.

Schroders’ Andy Brough, a top five shareholder, said the Frankie & Benny’s owner can emulate the stock market success of food operator SSP by rolling out concessions to airports and rail stations in America and India.

“Restaurant Group has been absolutely panned for the acquisition of Wagamama but Restaurant Group is the largest concession operator in the UK at airports and stations, it’s even ahead of SSP, and Wagamama will be a great addition to that brand both here and overseas,” he told the Sohn investment conference on Thursday.

Restaurant Group plans to make better use of its kitchen to sell takeaways through apps like Deliveroo, another reason to back the business, according to Brough.

The company owns top Deliveroo brands Burger Burger and Kick-Ass Burrito.

Shareholders rebelled over the £560 million takeover on Wednesday, with investors split 60/40 on the vote. Shares are down 22% over the past five days.

Brough said “a lot of fund managers don’t want to look forward and think how things are changing”.

He added that chief executive Andy McCue’s experience with data and tech running Paddy Power was a big factor in supporting the deal.

“What struck us was his incredible attention to detail, almost forensic analysis of data and his ability to build a new team around him,” he said.