Restaurant Group: Have shareholders been stitched up?
Restaurant Group is planning on buying Wagamama from its current private equity owners for £559m, £315m of which will be funded via a heavily discounted rights issue. With dilution and a dividend cut to stomach, it’s not a great time to be a Restaurant Group shareholder.
Restaurant Group (RTN) is having to raise £315m to fund its acquisition of Wagamama. Current investors have been offered new shares at a 57% discount to the closing price on the last day of trading prior to the announcement of the terms of the rights issue and at a 63% discount to the last day of trading before the acquisition was confirmed in late October. Shares are down 19% in the last two weeks. First the bad news – investors are clearly going to be diluted by the listing of 290m new shares which will represent approximately 59% of the…