KFC, Pizza Hut boss set for meaty payday
The chairman of KFC’s New Zealand owner is poised to make more than $1 million after accepting a conditional takeover bid for the company.
Restaurant Brands chairman Ted van Arkel – whose company runs the KFC, Pizza Hut and Carl’s Jnr brands in New Zealand plus operations overseas – has accepted a bid of $9.45 a share for his shareholding in Restaurant Brands from Global Valar.
The company has bid for a controlling stake of threequarters of Restaurant Brands.
If the takeover bid goes ahead, Van Arkel is poised to make $1.512m from the deal, minus whatever he paid for the shares and subject to the offer being scaled, disclosures to the New Zealand stock exchange showed.
The stake he is cashing in is a tiny 0.13 per cent of the billiondollar business.
And he’s not even nabbing the biggest lump of dosh. Chief financial officer Grant Ellis is cashing up a 0.14 per cent stake worth $1.756m, NZX disclosure notices revealed.
It’s been a big week for Restaurant Brands, which also announced its long-anticipated rollout of Mexican-style fast-food brand Taco Bell in New Zealand and Australia.
Yesterday the company released its third-quarter sales for the 12 weeks to December 3, which were $181.5m, up 4.7 per cent on the same period last year. To date the company has made sales of $612.5m, up 9.5 per cent.
Restaurant Brands is known for its aggressive growth, having bought up a string of KFCs in Australia in the past few years, and more recently the Taco Bell franchise in Hawaii and Guam.
The company has been a favourite with investors, but its share price still lingers below Valar’s takeover bid, trading at $8.49 yesterday morning. The shares have risen 22.22 per cent or $1.54 over the past year.
Forsyth Barr analyst Jeremy Simpson said the share price reflected the unknowns about the deal, should it proceed.
‘‘They are not buying 100 per cent. So if everyone accepted, you’d still own 25 per cent of the holding and that’s not going to trade at $9.45,’’ he said.
‘‘Some people might think it’s a different company now because the sum chairman Ted van Arkel will cash up if the deal with Global Valar goes ahead, for a 0.13 per cent stake the sum CFO Grant Ellis will cash up, for a 0.14 per cent stake Restaurant Brands’ thirdquarter sales for the 12 weeks to December 3 share price rise over the past year you’ve got one big shareholder calling the shots.
‘‘But then some people might think these guys [Global Valar] are actually really good at what they do and they’ve got a track record in Europe, and Restaurant Brands is potentially getting a bit stretched management-wise.’’
The other drawback was that the company would probably drop out of the NZX 50 index, as only a relatively small portion of its shares would be freely traded.
The Taco Bell announcement was likely to increase Restaurant Brands’ allure, although Simpson said it followed the less successful rollout of Carl’s Jnr.
Valar’s offer is also above the target valuation by independent adviser Grant Samuel, which put Restaurant Brands’ shares at between $8.15 and $8.92 each.
Simpson said it was normal for takeover bids to be about 25 per cent above the share’s preoffer trading price if they aimed to succeed. But shareholders appear to be holding out, with Global Valar so far only snagging control of just under 10 per cent of Restaurant Brands.
Global Valar is a subsidiary of Finaccess, a Mexican privateequity firm that has other investments in the fast-food business.