Malaysia Group Cooks Up an IPO -- WSJ
August 31 2016 - 2:02AM
Dow Jones News
Operator of KFC and Pizza Hut could raise more than $400 million
in 2017 listing
By Yantoultra Ngui in Kuala Lumpur, P.R. Venkat in Singapore and Alec Macfarlane in Hong Kong
A consortium that includes private-equity firm CVC Capital
Partners is planning an initial public offering for an operator of
KFC and Pizza Hut restaurants in Southeast Asia that could raise
more than $400 million, according to people familiar with the
matter.
The owners of Malaysia's QSR Brands, including CVC and Malaysian
pension fund Employees Provident Fund, are considering listing the
franchise operator on the local stock exchange next year, the
people said. QSR Brands is expected to invite bankers to pitch for
roles on the IPO next month, one of the people said.
QSR Brands is currently renegotiating royalty fees with Yum
Brands Inc., the Louisville, Ky.-based owner of the KFC and Pizza
Hut brands, ahead of the planned IPO, the people said, while
declining to give further details.
But one of the people said that CVC wants a new fee agreement
with Yum Brands in place before the IPO so that potential investors
can have a clearer view of QSR's business prospects.
Yum Brands didn't respond to a request for comment.
CVC, the Malaysian pension fund and Johor Corp., an investment
arm of the Johor state government, took QSR private in a $1.3
billion deal in 2012. Johor Corp., which owns a 51% stake in QSR
Brands, might continue to hold its shares in the company for longer
than the other investors, the people said.
"There is nothing yet to share at this juncture as it is still
early days," a QSR Brands spokesman said. CVC declined to comment,
while EPF and Johor Corp. weren't immediately available to
comment.
QSR's offering could appeal to investors given the growing
appetite for consumer stocks in Southeast Asia, as a decline in
commodity prices has weighed on shares of the region's oil and gas
companies.
The IPO, if successful, would be the first sizable
consumer-related offering in Malaysia in three years. The biggest
to date was convenience-store operator 7-Eleven Malaysia Holdings
Bhd.'s IPO, which raised $225 million in 2014.
Based in Selangor, Malaysia, QSR operates more than 450 Pizza
Hut restaurants in Malaysia and Singapore and over 750 KFC
restaurants in Malaysia, Singapore, Brunei and Cambodia, according
to its website. The company is also engaged in poultry production
and processing, baking and sauce production. One of the people said
that the IPO could exclude QSR's poultry production business.
London-based CVC, which owns a stake in motor-racing franchise
Formula One Group, has a longstanding presence in Southeast Asia.
Since 2013, CVC has raised more than $2 billion through share sales
of Indonesia's PT Matahari Department Store Tbk.
Write to P.R. Venkat at venkat.pr@wsj.com and Alec Macfarlane at
Alec.Macfarlane@wsj.com
(END) Dow Jones Newswires
August 31, 2016 02:47 ET (06:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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