Thai tycoon Charoen eyes KFC stake, including EPF’s
JUST two months after announcing the takeover of Thailand’s KFC restaurants, Thai tycoon Tan Sri Charoen Sirivadhanabhakdi, who controls Thai Beverage pcl, is believed to be making a move to buy a substantial stake in QSR Brands (M) Holdings Sdn Bhd.
QSR operates over 750 KFC restaurants in Malaysia, Singapore, Cambodia and Brunei as well as over 450 Pizza Hut restaurants in Malaysia and Singapore.
Johor Corp holds 51% stake in QSR, with the Employees Provident Fund (EPF) and CVC Capital Partners Ltd, a private equity firm, holding 25% and 24%.
According to a source, Charoen plans to acquire the EPF’s and CVC’s stakes. Sources told StarBiz that CVC, which has a five-year time frame to exit its investment, would be keen to sell while the EPF would sell if the price is right.
For CVC, it would be appropriate to exit as the time frame of its investment in KFC ends early next year.
This is on the score that it was part of the consortium that included Johor Corp and EPF that took QSR Brands and its listed subsidiary, KFC Holdings (M) Bhd, private in early 2013.
A private equity such as CVC has a time frame of five years before it exits.
Sources said Charoen was keen to diversify the operations of his flagship Thai Beverage, best known as the producer of Chang beer, as well as expand regionally.
The stake in QSR will give him access to markets beyond Thailand, including data on consumer trends in the fast growing Asean region.
According to news reports, Thai Beverage’s US$340mil (RM1.43bil) acquisition of Thailand’s KFC business would be completed by the end of the year. This would see the Singapore-listed Thai Beverage owning 240 KFC restaurants as well as other outlets in the pipeline.
Any move to buy a substantial stake in the KFC franchise would certainly need the blessing of Yum! Brands Inc, the US-based owner of the KFC, Pizza Hut and Taco Bell franchise brands.
Yum! has many conditions for stakeholders of its franchises.
The fact that Charoen took control of the Thai KFC business means that Yum! does not have any issues with him taking the EPF’s and CVC’s stakes in QSR.
Charoen made the headlines in early 2013 when he won control of Singapore-listed Fraser and Neave Ltd (F&N) in an offer that valued F&N, a beverage and property company, at US$11.13bil. This was after he lost the bid to control Asia Pacific Breweries Ltd, an equal joint venture between F&N and Heineken NV, which produces Tiger beer.
F&N sold its share of the venture to Heineken.
Early last year, Charoen, through Thai Charoen Corp (TCC), bought a 58.6% stake in Big C Supercenter pcl for US$3.5bil from French supermarket operator Groupe Casino.
The privately held TCC controls the business interests of the Sirivadhanabhakdi family, which encompasses food and beverage under Thai Beverage while through TCC Land Co Ltd, the family has the largest landholdings in Thailand as well as numerous real estate investments overseas including the Plaza Athenee in New York. – The Star
QSR operates over 1,200 restaurants. Johor Corp holds 51% stake in QSR, with the Employees Provident Fund (EPF) and CVC Capital Partners Ltd, a private equity firm, holding 25% and 24%. According to a source, Charoen plans to acquire the EPF’s and CVC’s stakes.