Restaurant Group one of most shorted shares

FRANKIE & BENNY’S owner The Restaurant Group is now among the most shorted stocks in London after hedge funds ramped up bets against it in the wake of its controversial £560m takeover of Asian food chain Wagamama.

Almost a tenth of its shares are on loan to short sellers, including Luxembourgbased Cigogne Management, which increased its short position by a third to 0.9pc on Tuesday, and Mayfair financier Crispin Odey.

The Wagamama deal will add hundreds of millions of net debt to TRG’S balance sheet, partly funded by £300m of new cash from shareholders, two fifths of whom voted against the acquisition last month. Some backers opposed the deal, saying that it was overpriced.

Short sellers borrow shares and sell them on, hoping to cash in by buying them back and returning them after they fall in value.

TRG’S stock is already down more than a third this year and recently touched its lowest level since the financial crisis. Its existing brands, which include Chiquito and Garfunkel’s, have been struggling.

Andy Mccue, chief executive, has said buying the better-performing Wagamama will be a “transformative opportunity” to ramp up growth overseas.

The rights issue went through on Friday.

The Restaurant Group declined to comment.