UK's Restaurant Group in talks with Cafe Rouge owner to divest leisure business

FILE PHOTO: Wagamama restaurant in London

LONDON (Reuters) - Restaurant Group (RTN.L), the owner of Wagamama restaurants and Frankie & Benny's, said on Saturday it is in "advanced discussions" with Big Table Group regarding the potential divestment of its leisure business.

"Whilst discussions are ongoing, there can be no certainty that they will lead to a transaction nor as to the final terms of any such transaction," Restaurant Group (TRG) said in a statement.

The comment was prompted by a Sky News report which said that Big Table, which owns the Cafe Rouge brand, is negotiating the purchase of the Chiquito's and Frankie and Benny's chains from TRG.

The report cited unidentified banking sources as saying a deal would involve TRG paying a multimillion pound dowry to Big Table to take Chiquito's and Frankie and Benny's off its hands.

Restaurant Group said in March it will cut the number of Frankie & Benny's and Chiquito restaurants by about 30% to boost margins.

On Friday it said Chairman Ken Hanna was stepping down after months of pressure from activist investors to change its management and improve profitability.

The company operates 380 restaurants and pubs in the UK. Its principal trading brands are Japanese noodle chain Wagamama and Brunning & Price.

As of Friday's close, TRG had a market capitalisation of 364 million pounds ($454 million).

($1 = 0.8023 pounds)

(Reporting by James Davey; Editing by Mike Harrison)