Activist hedge fund Oasis Management has threatened to push for the removal of The Restaurant Group (TRG) boss unless he delivers a shake-up of the struggling UK casual dining operator, according to two people with direct knowledge of the fund’s plans.
The Financial Times reports that the Hong Kong-based investor’s ambition is 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”.
The warning comes as rumours circulate about TRG weighing up a potential sale of its pubs business Brunning & Price, following pressure by Oasis to demonstrate greater value for its shareholder.
TRG rejected Oasis’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 6.5 per cent stake last month.
It 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, as well as management missteps, such as the decision to fully hedge energy costs just as the wholesale market peaked over summer last year.
The group will report its full-year earnings tomorrow (8 March), with the next AGM due to take place in May.
