Filipino fast food group Jollibee eyes bid for UK’s Pret A Manger — Sources
HONG KONG: Jollibee Foods Corp, popular in the Philippines for its sweet-style spaghetti and fried chicken, is exploring a bid for Britain’s Pret A Manger which could value the upscale sandwich chain at over US$ 1 billion, sources familiar with the matter said.
The deal would make an unlikely pairing.
Jollibee has a huge following in the Philippines, as well as with Filipinos overseas, for its burgers and other fast-food meals.
Pret, meanwhile, has built its reputation selling organic coffee and wholesome sandwiches to office workers in Britain and in cities like Hong Kong and New York.
Jollibee had been holding talks with an advisor over an offer for Pret, the sources said.
They declined to be named as the talks were not public.
The sources said Jollibee’s offer could value Pret at over US$1 billion, based on its 2016 core earnings of just over 93 million pounds.
A successful bid by Jollibee would mark the biggest overseas deals to date by the Flipino company, and potentially one of the biggest ever outbound deals from the Philippines.
Jollibee, with a market value of US$5.2 billion, operates the largest food service network in the Philippines with 2,700 restaurant outlets, including its eponymous chain of fast food stores with the ubiquitous smiling bee logo.
But it has also been expanding across Southeast Asia and beyond, hoping to appeal to lucrative local consumers as well as Filipino expatriates with coffee, donut and noodle offerings.
Pret, a chain with more than 400 shops worldwide, has built its reputation selling gourmet baguettes and offerings like wild crayfish-and-rocket sandwiches to office workers, and has since embraced health options like dairy-free coconut porridge.
Citing sources, Reuters reported earlier this year that Pret’s private equity owner, Bridgepoint, was preparing for a New York listing later this year.
Pret reported 2016 revenues of 776 million pounds ( US$ 1.1 billion).
The potential offer for Pret would compare with higher market values for rivals such as Shake Shack and Chipotle.
The trading multiples for the US listed rivals would imply a price more than twice what Jollibee is considering, analysts said.
Still, the company’s interest in Pret is still at an early stage and it has not yet finalised a valuation or had direct discussions with Pret, one of the sources said.
Jollibee declined to comment on Pret but said acquisition of new businesses was part of its growth strategy. — Reuters