The Restaurant Group (TRG) led the market fallers this morning after chief executive Andy McCue surprised the City by announcing plans to resign "due to extenuating personal circumstances".
TRG's share price plunged almost 15 per cent in morning trading following a statement today from McCue, who is set to remain in his position until a new boss is found.
The chief executive was thanked by the board "for his significant contribution to the business and in particular for leading its transition into higher growth areas, including the recent acquisition of Wagamama".
The news comes several months after TRG, which owns brands such as Frankie & Benny's, Chiquito and Garfunkel's, suffered a shareholder backlash over its proposed takeover of Wagamama, with 40 per cent of investors voting against the £559m deal.
A number of major shareholders, such as Pensions and Investment Research Consultants (Pirc) and Columbia Threadneedle Investments, had opposed the acquisition.
"What an unfortunate outcome for Restaurant Group. Losing its chief executive at such a crucial point in its recovery story is devastating for shareholders who have already gone through hell over the past few years," said Russ Mould, investment director at AJ Bell.
Mould added: "While we don’t know the full story as to why Andy McCue has resigned beyond it being for personal reasons, the news will rock the ship once more at Restaurant Group."
TRG's takeover of the noodle chain, which it says has outperformed the UK's casual dining market, comes as the group faces pressures of its own from higher wages, business rates and food inflation in recent years, with the firm reporting a two per cent drop in like-for-like sales during its full-year results late last month.
Yet McCue, who has been chief executive since September 2016, said today that TRG had "achieved much in a challenging market".
He added: "I’m confident The Restaurant Group is well positioned with the scale, talent and levers to drive profitable growth. While I recognise that this decision is untimely, it is the right one for me and my family. We have a strong team in the business and a clear plan which we are focused on delivering."
Chairman Debbie Hewitt said: "Andy has brought a strong vision, developed a first-class team and laid the foundation of the company’s transformation. Whilst we are clearly disappointed that he will not be able to provide the long-term leadership for the business, we understand and respect the decision he has made purely on personal grounds."
TRG said this morning that an announcement will be made regarding McCue's successor in due course, adding that "current trading remains in line with expectations and TRG will announce its preliminary results on Friday 15 March".