Restaurant Group (TRG) Shares Soared 37.8% on Takeover Offer

The Restaurant Group PLC (LON: RTN) share price soared 37.84% after announcing that it had reached a deal to be acquired by Rock BidCo Limited, a special-purpose vehicle indirectly owned by the Apollo Funds. Affiliates of Apollo Global Management manage the BidCo.

The two firms intend to implement the acquisition via a Court-sanctioned scheme of arrangement under Part 26 of the 2006 Act. The Rock BidCo is offering to pay 65p per share to TRG’s shareholders of record on the date that the deal is finally closed. 

The price offered by BidCo represents a 67% premium to the volume-weighted average price (VWAP) of 39p per TRG Share for the twelve months ended 11 October 2023, the last business day before the announcement. The price also represents a 34% premium to TRG's closing share price of 48p on 11 October 2023. 

The takeover values TRG's entire issued, and to be issued, ordinary share capital at approximately £506 million on a fully diluted basis. The figure suggests an enterprise value of £701 million and a multiple of about 9.0 times TRG's Adjusted EBITDA for the twelve months to 2 July 2023.

The acquisition has to be approved by the majority of TRG shareholders at the General Meeting and the Court Meeting. To become effective, the scheme of arrangement has to be approved by TRG shareholders representing at least 75% of the company’s issued share capital. 

TRG’s board unanimously voted to recommend the takeover offer to shareholders based on advice from its advisors. 

Ken Hanna, the Chair of TRG, said: “TRG operates a diverse portfolio of some of the UK's leading hospitality brands. As a result of ongoing positive management actions and the margin accretion plan we announced in March this year, the group has recovered well from the challenges of the pandemic and the cost of living crisis. This is evidenced by the continued strength of our trading performance versus the broader hospitality sector and the share price increasing 55% this year. In addition, the TRG Board and management of TRG have reviewed in detail the strategic options available to the group, resulting in the announcement of the proposed sale of the Leisure business.”

Restaurant Group (TRG) share price. 

The Restaurant Group (TRG) share price soared 37.84% to trade at 66.88p, from Wednesday’s closing price of 48.52p.