Despite receiving approval from the Overseas Investment Office and Yum! Brands Inc., shareholders have still not accepted the offer to purchase Restaurant Brands. The Restaurant Brands board is urging shareholders to approve the sale, which expires on Tuesday, saying there is no better offer currently on the table. As of Wednesday, acceptances stood at 33.7 percent. Finaccess intends to gain a controlling stake and will cap its bid at 75 percent.
Earlier this week, Finaccess CEO José Parés Gutiérrez praised the OIO process.
“The level of response from the OIO has been very professional and the experience so far has been very good,” he said. “In other countries, it’s more like going into a black box in which you drop your application and you don’t get any feedback. Here they have been very courteous and keep you in the loop. So my opinion is very positive about the job they are doing.”
In an interim report, figures showed that Restaurant Brands had raised full-year sales by 7.2 percent, despite total store numbers dropping by 31 following the sale of all Starbucks outlets and eight Pizza Hut restaurants. The growth was primarily driven by sales in Australia (up 27.8 percent) and Hawaii (up 4.1 percent), with a small dip (0.4 percent) in New Zealand sales. As usual KFC was the big driver, bringing in $336.5 million for the company over the last 12 months.
Finaccess Capital, a firm based out of Mexico, operates KFC, Pizza Hut, Burger King and Starbucks outlets in Europe and China, and offered $9.45 a share for 75 percent of the company – a premium to the $7.60 close and higher than $8.15, the record share price reached by Restaurant Brands in June 2018. The rest of the company will remain publicly listed, with Parés claiming that keeping minority shareholders would keep the company market stable.
“We believe the 75 per cent allows us to get control of the company, we are not shy about that, but it also allows the existing shareholders to continue to be part of the growth story,” Parés said in a recent interview.
The firm has said that it does not plan to raise new equity in the short-term, but isn’t ruling it out should there be an acquisition that isn’t covered by current cashflow. Parés also said that there was no intention of the company taking over 100 percent ownership.
Finaccess has had its eye on Restaurant Brands for over a year now, although the takeover bid was only announced towards the end of 2018.
“We ran a very conscious analysis of the opportunities of the business and we came up with what we thought was a fair price,” Pares explained. “It’s a very good price, and it tells you how interested we are and serious we are about the transaction.”
Pares noted the innovation coming out of New Zealand, such as KFC’s flagship Fort Street restaurant where customers can order from kiosks and have their meal delivered to them, is unique in the world, and could potentially be used in other markets.
“It is our intention to leverage our significant resources to fully support their future business development and growth initiatives, both within New Zealand as well as internationally,” Parés said.
The Restaurant Brands board approved the purchase in December last year. The purchase will see Russell Creedy stay on as CEO for at least three years.