Hornby in the firing line at Wagamama as activist investor calls for overhaul arguing bosses have ‘lost focus’
Former HBOS chief Andy Hornby has come under pressure after an activist investor issued a rallying cry for an overhaul at the firm he now runs.
Hedge fund Oasis Management slammed The Restaurant Group (TRG), owner of Wagamama and Frankie & Benny’s’ board, arguing bosses had ‘lost focus on long-term value creation’.
Oasis – which owns 6.5 per cent of the leisure business – said in a letter that urgent changes were needed to tackle the group’s dismal share price.
Under fire: Former HBOS boss Andy Hornby (pictured) is in the spotlight again after an activist investor issued a rallying cry for an overhaul at the firm he now runs
In retaliation TRG, which owns 423 venues across the UK including the Chiquito and Frankie & Benny’s chains, said it had rejected Oasis’s request for a board seat and calls for a strategic review of the company led by an ‘independent bank’.
The attack by Oasis means Hornby – who is Restaurant Group chief executive and who headed Halifax Bank of Scotland when it was brought to its knees in the 2008 financial crisis – is in the spotlight again.
Shares at TRG have sunk 66 per cent over the past year. Hong Kong-based Oasis said it made it ‘one of the worst performing share prices of any UK leisure company’, far behind its rivals.
The crash was ‘disproportionately worse than what the impact of the challenging sector backdrop would alone justify’, it said.
It has been a torrid time for the sector as pubs and restaurants’ recovery from the Covid pandemic has been blighted by eye-watering energy bill hikes and inflationary pressure on consumers which have crimped high street spending.
A ‘crisis of confidence’ had led the investor to urge the hospitality business to ‘urgently discuss with its shareholders the necessity for meaningful, immediate and near-term governance change’.
But TRG pointed to the Covid pandemic and cost-of-living crunch as having ‘created huge challenges’ for hospitality firms across the country.
But bosses said ‘swift and decisive management actions’ during the pandemic meant the company had been ‘successfully guided through an extremely challenging period’.
TRG’s response said its performance had ‘been strong when compared to the wider UK casual dining sector’ and noted many of its rivals were privately owned.
