Restaurant Brands New Zealand director Stephen Copulos has agreed to sell his 8.6 percent stake in the fast food franchise operator to Mexican suitor Finaccess Capital.
Australian director Copulos joined the board in 2016 when he sold his New South Wales KFC franchise to Restaurant Brands for A$82 million in cash and shares, and now he wants to cash up his remaining stock and accept the Finaccess deal. He has entered a lock-up arrangement with the Mexican firm to sell his 10.6 million shares at $9.45 apiece, subject to scaling.
Finaccess has yet to formally lodge its takeover bid for 75 percent of the fast food firm, having unveiled the potential deal in October. Since then, it’s secured Copulos’s stake, and could pay him as much as $100.2 million, depending on the uptake. The offer would be a 24 percent premium to what the shares were trading before it became public.
Restaurant Brands chair Ted van Arkel and director David Beguely haven’t entered into formal arrangements with the suitor, but in notices to the NZX, they each indicated their intention to accept the offer unless it’s trumped by a better bid or doesn’t fall within an independent valuer’s range. Grant Samuel has been hired to prepare the report.
“The partial takeover provides shareholders an opportunity to accelerate the realisation of some of the future value of the shares, at an attractive premium to the market price before the partial takeover was announced, while retaining an ongoing exposure to Restaurant Brands’ future performance,” van Arkel said. “The board strongly encourages shareholders to not take any action in respect of their shares until they receive the target company statement.”
Any deal would need approval from the Overseas Investment Office and Yum! Brands, which owns the KFC, Pizza Hut and Taco Bell brands.
Yum! has given conditional approval for the deal, although that requires Finaccess to make a reasonable attempt at retaining chief executive Russell Creedy for at least three more years.
If the takeover is successful, Finaccess said it will keep the dividend policy unchanged for the near term, and promises not to de-list the company in the following 12 months unless it mounts a full takeover. If it does seek to mop-up the remaining shares, it promises not to offer a lower price, subject to wider movements on the benchmark NZX 50 index.
Finaccess has told Restaurant Brands that it doesn’t envisage raising new equity in the near to medium term, while noting that could change if there was a larger deal than could be funded from existing cash flow.
“We recognise Restaurant Brands’ impressive historical growth track record, including through organic store roll-outs as well as significant bolt-on acquisitions,” Finaccess chief executive José Parés Gutiérrez said. “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.”
Restaurant Brands shares rose 2.4 percent to $8.65.