Activist investor threatens to push for removal of TRG boss
As reported by the Financial Times, Oasis Management, a Hong Kong-based hedge fund that owns a 6.5% stake in the business, is aiming to put TRG in a 'virtuous circle' where it can 'reduce debt, reduce interest, resume dividends . . . get a higher stock rating, better market cap [and] attract better people'.
Last month, Oasis Management released a public letter that called for an ‘immediate and near-term’ change of governance at TRG following what it said had been poor performance in its share prices.
It described the group as having "one of the worst performing share prices of any UK leisure company; materially worse than its closest peers, and disproportionately worse than what the impact of the challenging sector backdrop would alone justify”.
In response, TRG said at the time that the current cost-of-living crisis and the challenges that UK hospitality industry faced had been reflected in its share price, adding that its performance since Covid had been strong when compared to the wider UK casual dining sector.
The latest warning comes as rumours circulate about TRG weighing up a potential sale of its pub business Brunning & Price, following pressure by Oasis.
TRG rejected the investor's requests for a strategic review of the company led by an independent bank and for a board seat when the fund went public with its stake last month.
The group has said it is already in the process of reviewing its strategic options.
A source close to TRG said Oasis’ views on management failings were 'isolated' and not shared by other shareholders, according to the Financial Times, while a source close to Oasis disputed the claim that no other investors were supportive of its requests.
The Oasis source cited investor dissatisfaction with the small size of the board; the pay of senior executives; and management missteps, such as the decision to fully hedge energy costs just as the wholesale market peaked over summer last year.
TRG, which owns the Wagamama and Frankie & Benny’s restaurant brands, will report its full-year earnings tomorrow (8 March) with the next AGM due to take place in May.
