Sale of Middle East Fast-Food Operator Back on Table
June 19 2016 - 09:40PM
Dow Jones News
DUBAI—A group of Persian Gulf investors has agreed to buy a
majority stake in the Middle Eastern operator of fast-food brands,
such as KFC, Pizza Hut and Hardee's, for about $2.5 billion, just
weeks after the deal had appeared to collapse.
The sale of Kuwait Food Co., also known as Americana, would cap
a process that started in 2014 and attracted interest from global
heavyweight investors including buyout firm KKR & Co. and
Singapore's Temasek. The takeover saga came to illustrate the
capricious nature of the Middle Eastern market for mergers and
acquisitions, where large transactions often get drawn out, or
falter at the last moment.
Under the terms of the transaction, the investment group named
Adeptio will buy a controlling stake in Americana from an entity
owned by the wealthy Kuwaiti Kharafi family at 2.65 Kuwaiti dinars
($8.78) a share, it said late Saturday. The offer represents a 26%
premium over its June 15 closing market price. Adeptio will then
offer to buy the remaining shares outstanding at the same price, as
per Kuwaiti stock market rules.
At the end of May, the two companies had called off the deal,
saying they couldn't reach an agreement on the terms.
Adeptio in February had offered to buy a 69% stake in Americana.
For the same stake, the group is set to pay about $2.5 billion,
which would make the deal the largest in the region this year so
far.
Bankers have pinned the blame for the sluggish M&A market in
the Middle East on the fall in oil prices and related stock market
volatility.
"I think a transaction of this size and complexity provides a
timely shot in the arm for the high-end M&A market in the
region," said Mohammed Al-Shukairy, a partner at law firm Clifford
Chance, which advised the sellers.
The group of buyers is led by Mohamed Alabbar, an Emirati
business man who also heads Dubai's flagship developer Emaar
Properties, the company behind the world's tallest tower.
Founded in 1964, Americana grew into one of the largest
operators of fast-food chains in the Middle East and North Africa
with about 1200 outlets, including brands such as TGI Friday's,
Pizza Hut, KFC and Hardee's.
The region's food and beverages sector has become a favorite
with investors in recent years, as demand for fast food in
particular has been on the rise. Smaller deals across the region
took place in recent years, for example The Carlyle Group buying
food companies in Jordan and Saudi Arabia and Kellogg Co. buying
two entities in Egypt.
Write to Nicolas Parasie at nicolas.parasie@wsj.com
(END) Dow Jones Newswires
June 19, 2016 21:25 ET (01:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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