PizzaExpress owner considers offer for UK rival TRG

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The owner of PizzaExpress is weighing a possible rival offer for Wagamama owner TRG, weeks after private equity group Apollo agreed a surprise deal to take the casual-dining operator private. 

TRG said on Thursday that “it has received a request within the last week . . . for diligence information” from Wheel Topco, the company behind PizzaExpress — which is owned by US debt funds including Cyrus Capital Partners and Bain Capital Credit — in order “to evaluate a possible offer”.

The preliminary talks involving PizzaExpress come just a fortnight after TRG’s board announced it had accepted an all-cash offer from Apollo that valued the group at 65p a share or an equity value of £506mn. The deal implied an enterprise value, including debt, of £701mn.

The Apollo offer followed a months-long activist campaign, led by Hong Kong-based fund Oasis Management, pushing for a shake-up at TRG, which also owns pub chain Brunning & Price.

Oasis, which is TRG’s largest shareholder with 17.8 per cent of the stock, and another activist Irenic Capital, a New York-based fund, committed to an “irrevocable undertaking” to vote in favour of the Apollo deal, but that undertaking will lapse if a rival bid is 10 per cent above the original offer price.

TRG’s board said on Thursday that it “will provide diligence information” to PizzaExpress and that it would “carefully consider” the terms of any possible bid, but it added: “There can be no certainty that an offer by Wheel Topco will be made for the company, nor as to the terms on which an offer might be made.”

PizzaExpress’s interest was first reported by Sky News. PizzaExpress declined to comment.

Unlike Apollo, which has few other investments in the UK restaurant sector, PizzaExpress, which runs 370 sites across the UK and Ireland, could benefit from cost synergies through a tie-up with TRG, which could justify paying a higher price, according to people closely following the talks.

A group with existing UK restaurant operations could benefit from “very meaningful” cost synergies, said a person close to the talks. A strategic buyer “would bring suppliers, landlords, every single relationship and you could take cost out of each line, as well as get better revenue synergies by having two groups together,” the person said. “You could even get rid of management teams and have the same managers running one restaurant chain, running the other.”

Allan Leighton, who has chaired PizzaExpress since 2020, previously served as chair of Wagamama when it was owned by private equity firm Duke Street Capital. He oversaw its sale to TRG in 2018, before taking a non-executive position on TRG’s board after the deal.

TRG’s share price was 66.5p at market close on Wednesday, above the initial offer price.

Last month, TRG offloaded its Frankie and Benny’s and Chiquito chains to Cafe Rouge owner Big Table group, saying it would pay its rival £7.5mn to take the lossmaking businesses, along with about £50mn worth of lease liabilities, off its hands. Ken Hanna, TRG’s chair, also announced last month that he planned to leave the company.