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Frankie & Benny's owner Restaurant Group buys Wagamama

Frankie & Benny's owner Restaurant Group buys Wagamama
FILE PHOTO: People walk past a branch of restaurant chain Wagamama in Manchester, Britain September 21, 2017. REUTERS/Phil Noble   -   Copyright  PHIL NOBLE(Reuters)
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(Reuters) – Britain’s Restaurant Group Plc <RTN.L> said on Tuesday it had acquired the Wagamama noodle chain for 357 million pounds ($457.03 million) in cash, expanding its chain of pubs and airport and shopping mall eateries.

The deal marks a shift for Restaurant Group, most of whose restaurants and gastropubs focus on American, TexMex and traditional British cuisine and is expected to generate cost synergies of about 22 million pounds.

Restaurant Group will launch a 315 million pound rights issue to fund the deal, which it expects to be earnings enhancing in the first full year and accretive thereafter.

The company said the deal had an enterprise value of 559 million pounds, and included 138 directly-operated restaurants in the UK and the US and 58 franchised restaurants in Europe, the Middle East and New Zealand.

Wagamama began in 1992 in London’s Bloomsbury and has expanded steadily into a national presence since, becoming a familiar feature on British high streets.

The deal will be funded through a combination of cash, debt and the rights issue.

($1 = 0.7811 pounds)

(Reporting by Sangameswaran S in Bengaluru; editing by Patrick Graham)

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