The Malay Chamber of Commerce Malaysia plans to bid for a controlling stake in fast-food restaurants operator QSR Brands Bhd, rivaling an earlier US$1.6 billion buyout offer for the company and a subsidiary by CVC Capital Partners Ltd and Johor Corp.
The chamber will offer RM6.90 per share for Kulim (Malaysia) Bhd’s majority stake in QSR, the chamber’s President Syed Ali Alattas said in a telephone interview yesterday. London-based buyout group CVC Capital and Malaysia’s Johor Corp made the RM6.80 per share bid on Dec. 14.
At stake is control of more than 900 fast-food outlets in Southeast Asia and India for brands including KFC and Pizza Hut. Kulim directly owns 54 percent of Kuala Lumpur-based QSR which in turn controls KFC (Malaysia) Holdings, according to data compiled by Bloomberg. Kulim last year rejected two RM6.70 per share takeover bids for QSR, including one from Washington- based Carlyle Group.
“We could set up an investment company and we’re talking to banks,” Syed Ali said. “Our chamber has more than a million members. We could invite members like Felda, Tambung Haji and PNB to join us.”
The Felda Land Development Authority, or Felda, Lembaga Tabung Haji and Permodalan Nasional Bhd. are so-called “Bumiputera” trusts, which invest on behalf of the country’s ethnic Malays and indigenous people.
Cheaper Option
Unlike the Malay Chamber’s offer, CVC Capital and Johor Corp. bid for all the assets and liabilities of both QSR and KFC Malaysia. That would cost them more than RM5.24 billion (US$1.6 billion) excluding warrants, according to Bloomberg News calculations. QSR and KFC’s independent directors backed this offer on Dec. 21, though minority shareholders have yet to vote.
The Chamber is seeking a cheaper option by gaining control of both companies by only acquiring Kulim’s QSR stake. This would cost it about RM1.1 billion, based on Bloomberg News calculations. “This is what I call the smart route,” Syed Ali said.
Johor Corp, the investment arm of Malaysia’s Johor state government, currently controls both companies through its 56 percent Kulim stake.
“The Malay Chamber’s offer is not likely to go through as both KFC and QSR boards had already stated that they will not consider any other offers,” Hoe Lee Leng, an analyst at RHB Capital Bhd wrote in a report today. “Furthermore, the chamber’s offer to purchase a stake in QSR would require the approval of Kulim’s shareholders, of which Johor Corp is the majority shareholder.”
RHB maintained its “trading buy” rating on KFC Malaysia and so-called “fair value” of RM4, according to the report.
Kulim rose 0.5 percent to a record RM4.09 at 10.37 a.m. in Kuala Lumpur trading today. QSR climbed 0.2 percent to RM6.44, while KFC Malaysia gained 0.5 percent to RM3.79, tracking a 0.3 percent advance in the benchmark FTSE Bursa Malaysia KLCI Index.
QSR operates about 260 Pizza Hut restaurants in Malaysia and Singapore, while KFC Malaysia operates more than 620 fried- chicken outlets in Malaysia, Singapore, Brunei, Cambodia and India, according to their respective websites.
Yum! Brands Inc., based in Louisville, Kentucky, owns the KFC and Pizza Hut brands. -- Bloomberg
The chamber will offer RM6.90 per share for Kulim (Malaysia) Bhd’s majority stake in QSR, the chamber’s President Syed Ali Alattas said in a telephone interview yesterday. London-based buyout group CVC Capital and Malaysia’s Johor Corp made the RM6.80 per share bid on Dec. 14.
At stake is control of more than 900 fast-food outlets in Southeast Asia and India for brands including KFC and Pizza Hut. Kulim directly owns 54 percent of Kuala Lumpur-based QSR which in turn controls KFC (Malaysia) Holdings, according to data compiled by Bloomberg. Kulim last year rejected two RM6.70 per share takeover bids for QSR, including one from Washington- based Carlyle Group.
“We could set up an investment company and we’re talking to banks,” Syed Ali said. “Our chamber has more than a million members. We could invite members like Felda, Tambung Haji and PNB to join us.”
The Felda Land Development Authority, or Felda, Lembaga Tabung Haji and Permodalan Nasional Bhd. are so-called “Bumiputera” trusts, which invest on behalf of the country’s ethnic Malays and indigenous people.
Cheaper Option
Unlike the Malay Chamber’s offer, CVC Capital and Johor Corp. bid for all the assets and liabilities of both QSR and KFC Malaysia. That would cost them more than RM5.24 billion (US$1.6 billion) excluding warrants, according to Bloomberg News calculations. QSR and KFC’s independent directors backed this offer on Dec. 21, though minority shareholders have yet to vote.
The Chamber is seeking a cheaper option by gaining control of both companies by only acquiring Kulim’s QSR stake. This would cost it about RM1.1 billion, based on Bloomberg News calculations. “This is what I call the smart route,” Syed Ali said.
Johor Corp, the investment arm of Malaysia’s Johor state government, currently controls both companies through its 56 percent Kulim stake.
“The Malay Chamber’s offer is not likely to go through as both KFC and QSR boards had already stated that they will not consider any other offers,” Hoe Lee Leng, an analyst at RHB Capital Bhd wrote in a report today. “Furthermore, the chamber’s offer to purchase a stake in QSR would require the approval of Kulim’s shareholders, of which Johor Corp is the majority shareholder.”
RHB maintained its “trading buy” rating on KFC Malaysia and so-called “fair value” of RM4, according to the report.
Kulim rose 0.5 percent to a record RM4.09 at 10.37 a.m. in Kuala Lumpur trading today. QSR climbed 0.2 percent to RM6.44, while KFC Malaysia gained 0.5 percent to RM3.79, tracking a 0.3 percent advance in the benchmark FTSE Bursa Malaysia KLCI Index.
QSR operates about 260 Pizza Hut restaurants in Malaysia and Singapore, while KFC Malaysia operates more than 620 fried- chicken outlets in Malaysia, Singapore, Brunei, Cambodia and India, according to their respective websites.
Yum! Brands Inc., based in Louisville, Kentucky, owns the KFC and Pizza Hut brands. -- Bloomberg
