Yum China Shares Rise in First Trading Day After Spinoff
November 01 2016 - 10:50AM
Dow Jones News
Shares of Yum China Holdings Inc. rose in their first day of
trading on the New York Stock Exchange after the spinoff of Yum
Brands' China unit was completed earlier Tuesday morning.
Yum China shares, trading under the stock symbol YUMC, rose 2%
to $24.72 in early trading. Yum Brands added 40 cents to
$62.44.
Under the spinoff plan, Yum Brand holders of record as of Oct.
19 received one Yum China share for each share they held of the
parent firm.
Yum China is the exclusive licensee of Yum Brands in China,
including KFC, Taco Bell and Pizza Hut, and will pay its former
parent a percentage of its sales. With more than 7,300 restaurants,
Yum China generated sales of more than $8 billion last year.
Just over a year ago, Yum Brands unveiled plans to spin off the
China unit, which had been beset by issues such as food-safety
scares and stronger competition, after pressure from activist
investors.
The spinoff was completed as Yum Brands plans to expand globally
with thousands of new restaurant openings in the next several years
while also shifting more restaurant ownership to franchisees. Many
restaurant brands have been moving to an "asset light" structure in
which they own the brands but not the actual restaurants.
Yum in September struck a deal to sell part of the China unit to
a prominent Chinese deal maker and the financial affiliate of
Chinese internet company Alibaba Group Holding Ltd. Primavera
Capital, run by former Goldman Sachs Group Inc. Greater China
Chairman Fred Hu, and Ant Financial Services Group agreed to buy a
combined $460 million stake in the Yum China spinoff.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
November 01, 2016 10:35 ET (14:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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