RE: Telegraph articles26 Jun 2023 08:38
Activist investors have launched a fresh attack on the parent company of Wagamama after its finance chief stepped down and its share price plunged by 20pc in one month.
The Hong Kong-based hedge fund Oasis Management, which has built up a 14pc stake in the noodle chain’s parent company The Restaurant Group (TRG), fired a salvo at the company for promoting a finance chief with close links to its boss Andy Hornby.
Oasis, now TRG’s second-biggest shareholder, said it was “concerning” that Mark Chambers had worked with TRG’s chief executive Mr Hornby for years prior to TRG and had not held a chief financial officer role for a decade.
Daniel Wosner, MD and head of Europe at Oasis, told The Telegraph: “The company appointed, in a matter of weeks, a candidate who has worked with the CEO at … other companies, and not in a CFO role. Was this truly a robust and healthy process to find the best candidate for the company?”
TRG’s chief executive, Andy Hornby, has been locked in a battle with Oasis since the end of 2022 CREDIT: Richard Green
Mr Chambers worked under Mr Hornby from 2012 at the gambling firm Coral (which became Ladbrokes Coral and eventually GVC Group), which Mr Hornby led, before joining TRG in 2019. Mr Chambers joined TRG in 2020.
Mr Chambers, who is currently TRG’s leisure and concessions boss, will officially take over as chief financial officer in September. He replaces Kirk Davis, who has been the restaurant company’s finance chief for five years. It comes shortly after non-executive director Alex Gersh, who chaired TRG’s audit committee, also said he was stepping down, citing “other work commitments”.
A spokesman for TRG said: “The TRG board ran a thorough internal and external search process.”
It comes as TRG’s chief executive Mr Hornby – who was at the helm of Halifax Bank of Scotland when it collapsed in 2008 – has been locked in a battle with Oasis since the end of 2022. Oasis has singled out the company’s business strategy, low share price, debt levels and the high salaries paid to Mr Hornby and other top executives and heaped pressure on the board.
Other activists have joined the fray since, including the New York-based funds Irenic Capital and Coltrane Asset Management, as well as the British Virgin Islands-based TMR Capital, which is thought to own around 1,000 shares but has met with Mr Hornby and chairman Ken Hanna.
Over the last five years TRG’s share price has dropped by around 80pc as it struggled to recover from the pandemic. It has also had to contend with the surging cost of everything from energy to ingredients, and, although its sales grew in 2022, losses more than doubled, hitting £86.6m. It has closed a swathe of underperforming sites this year.
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