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The Hong Kong-based hedge fund that waged an activist campaign pushing for a shake-up at Wagamama owner The Restaurant Group stands to net £40mn in profit from its position after private equity giant Apollo made a surprise bid for the restaurant operator.
Apollo announced this week that it had struck an all-cash deal to buy TRG for an equity value of £506mn and that, as part of the agreement, Oasis — TRG’s biggest shareholder with a 17.8 per cent stake — had signed an “irrevocable undertaking” to offload its holding. The deal implied an enterprise value, including debt, of £701mn.
The sale, which is set to close early next year, would mark a rapid victory for Oasis after going public with its demands just eight months ago. Apollo’s offer values Oasis’s stake in TRG at just above £90mn from which the hedge fund stands to make £40mn of profit, according to regulatory filings and people briefed on the matter.
Oasis has only committed to a “soft” irrevocable undertaking, which means that if a rival bidder emerges with an offer 10 per cent higher than Apollo’s 65p-a-share bid, the Hong Kong fund could generate even more profit from the position. Analysts at Stifel said this week that the Apollo offer could “flush out” a rival bid.
Oasis, which mainly focuses on companies listed in Japan and South Korea, first bought a 2 per cent stake in TRG in late 2020 before exiting its holding. Then, over summer last year, it bought back into TRG, crossing the 5 per cent disclosure threshold in November 2022.
In February this year, Oasis went public with demands for a shake-up of the casual dining operator, saying at the time it held 6.5 per cent of TRG. In the months that followed, Oasis seized opportunities when the stock slumped to increase its shareholding.
Oasis bought shares from Odey Asset Management after it sold some of its portfolio in the wake of sexual assault allegations against its founder Crispin Odey to raise liquidity and it bought some from US asset manager Columbia Threadneedle, the previous largest shareholder.
Oasis was vocal in its criticism of TRG management’s strategy as well as spearheading a shareholder revolt against executive pay and the reappointment of chief executive Andy Hornby and chair Ken Hanna at an annual general meeting this year. Hanna announced he was leaving, citing “personal reasons”, last month.
A person familiar with Oasis’s thinking said the sale was a “great result and a great [internal rate of return]”. “Other people followed Oasis in and made a lot of money — and Oasis made a lot of money,” the person said.
Oasis was founded in 2002 by Seth Fischer, a former portfolio manager in Asia for JPMorgan Chase’s Highbridge Capital. The TRG position was run by Daniel Wosner, who oversaw Oasis’s last major UK activist campaign against Premier Foods, a position it finally exited from last year after five years when it gave up its board seat.
Other hedge funds including New York-based Irenic Capital and Coltrane Asset Management as well as London-based Berry Street Capital also took part in the activist campaign. All the other funds own single-digit positions beneath the 5 per cent disclosure threshold.
Oasis exploited “big liquidity moments” to “take out” Odey and Columbia Threadneedle, said another person close to the fund. That gave Oasis “more meaningful control” over TRG’s future, the person added.
Oasis and TRG declined to comment.