• Oasis firmly believes in the underlying value potential of The Restaurant Group’s core brands and emphasizes its long-term commitment to the Company.
• The Restaurant Group has raised equity capital three times in the last five years whilst markedly underperforming sector peers. Oasis considers this failure to deliver value to shareholders to have propagated low market confidence and unattractiveness to new investor capital.
• Oasis calls on The Restaurant Group to communicate to the market the strategic direction of the Company and means of value creation. Further to this, it should engage with shareholders on all options for meaningful governance change in the near-term to promote this value creation and alignment with shareholders.

Oasis Management Company Ltd. (“Oasis”) is the manager to private funds that beneficially own approximately 6.5% of The Restaurant Group plc (LSE:RTN) (“TRG”, or the “Company”). Oasis seeks enhanced collaboration with portfolio company boards where such an approach can unlock value for all stakeholders in the long-term.

Oasis has been engaging with TRG for several years based on a firm belief that the Company possesses a strong portfolio of core assets, including Wagamama, the restaurant chain, and Brunning & Price, the pub group. However, despite the considerable value of these assets, TRG has 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.

The poor shareholder experience of this long-term decline in market value is further exacerbated when taking into account the Company’s three equity raises since 2018, with proceeds totalling £547m. Since the close of the latest of these rounds in March 2021, the share price has fallen approximately 65%, reducing the Company market capitalisation to around £265m, just half of the combined proceeds raised. Since the close of the first raise in 2018, used to fund the acquisition of Wagamama, the share price has plummeted approximately 70%.

Oasis maintains that this decline – which began before the pandemic – is due to group level decision-making and failure of oversight by a Board that has lost focus on long-term value creation and its alignment with the shareholder perspective. Oasis considers that the Board’s approach has caused strategic stagnation and the deterioration of standards in market communication, resulting in a continuing and prolonged period of relative share price underperformance.

This persistent loss of focus is particularly concerning considering the lack of demonstrated value delivered by the TRG Board relative to promises made alongside the shareholder funding used to recapitalize the business. Still worse, Oasis considers Company announcements and market consensus to indicate little hope for the future based on the current trajectory, propagating low market confidence and unattractiveness to new investor capital.

This crisis of confidence casts significant doubt over the ongoing strategic decision-making by the Board in its current form unless there is a meaningful recovery of market confidence that the Board is aligned with the shareholder perspective. Oasis believes this presents a compelling rationale for significantly improved board-level oversight and strategic guidance at TRG, to urgently re-align the Board’s priorities. This message has been conveyed to the TRG Board but has thus far been rejected out of hand suggesting the motivation to address the concerns is not currently shared. This reception has ultimately led to Oasis’ decision to open the discussion publicly.

We implore the Board to urgently discuss with its shareholders the necessity for meaningful, immediate and near-term governance change at TRG to promote alignment with the shareholder perspective.

Oasis expects that a process should be conducted separately from the scheduled annual outreach which seeks support for general meeting items and held independently of management to allow shareholders to provide meaningful input on the future composition of the Board.

Oasis further urges the Board to improve its communication with the market by providing guidance on the strategic direction of the Company and means of value creation, appreciating the necessity for transparency in realising a more efficient market appraisal of underlying company value and promoting the opportunity for strategic outcomes in full market view.

Oasis firmly believes that these steps will begin to allow the Board to renew focus on long-term value creation; failure to recognise this and work with stakeholders who are committed to TRG’s future, will increase the risk of further deteriorating public market interest and leave shareholders with no recourse but to seek to hold its representatives to account.

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Oasis is publishing this release solely for informational purposes in its capacity as manager of and/or investment advisor to private funds managed and/or advised by it. The release and the information, statements, opinions, interpretations and beliefs contained in it are exclusively those of Oasis and are provided in good faith, but no representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the contents of the release, and no person shall be entitled to place any reliance on the release or its contents. This release is not intended to be, nor should it be construed as, investment, financial, tax or legal advice, or a recommendation to buy, sell or hold any security or other investment or pursue any investment strategy. Neither the release nor any of its contents constitutes an inducement or offer to purchase or sell or a solicitation of an offer to purchase or sell any securities or other investments in The Restaurant Group PLC or any other person.

About Oasis

Oasis Management Company Ltd. manages private investment funds focused on opportunities in a wide array of asset classes across countries and sectors. Oasis was founded in 2002 by Seth H. Fischer, who leads the firm as its Chief Investment Officer. More information about Oasis is available at https://oasiscm.com.

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