KFC and QSR buyout close to fruition

KUALA LUMPUR: The buyout of KFC Holdings (M) Bhd (KFC) and its parent, QSR Brands Bhd by the Johor Corp (JCorp)-led consortium is coming closer to fruition with the JCorp board now finalising the sale and purchase agreement (SPA), sources said.

StarBiz had reported that a government-linked investment company (GLIC) would be part of special purpose vehicle (SPV) in the buyout exercise. They said the GLIC would be the second biggest shareholder in KFC/QSR after JCorp, upon completion of the buyout.

Private equity player, London-based CVC Capital Partners Ltd, will hold a minority stake in Massive Equity Sdn Bhd (MESB) which is the SPV doing the buyout.


Fine tuning: JCorp board is now finalising the SPA for the buyout of KFC and its parent QSR, according to sources.
Sources said that CVC was in agreement to having the GLIC in the structure, which was a deviation from the original proposal of only having JCorp with 51% and CVC with the balance 49% in the SPV. (The new structure is for the GLIC to hold the majority of the 49% portion in MESB, with CVC holding a minority stake in it.)

It had been earlier reported that the buyout faced some challenges and the privatisation was believed to be on the rocks due to some concerns that United States Kentucky-based Yum! Brands Inc, the licensor and owner of the KFC and Pizza Hut brand names, has had over the takeover.

These concerns were acknowledged by JCorp president and chief executive Kamaruzzaman Abu Kassim who said at a press conference last month that Yum! Brands’ main concern was the “growth of the business” post privatisation, adding that in principle Yum! has had “no objections” to the privatisation.

“There are many factors before we can say yes or no. We cannot say something for sure until we have reached that position. We have briefed them about the proposal,” he said last month.