Teriyaki Boy-Yellow Cab merger secures regulatory approval

MAX’S GROUP, Inc. (MGI) secured the green light from the corporate regulator to merge two subsidiaries as part of its reorganization.

In a disclosure to the stock exchange on Thursday, the country’s largest casual dining restaurant operator said the Securities and Exchange Commission (SEC) approved the merger of Teriyaki Boy Group, Inc. (TBGI) and Yellow Cab Food Corp., with TBGI as the surviving entity.

“The resulting transaction is part of the continuing corporate reorganization activities to derive operational efficiencies and does not cause any adverse impact to existing shareholders,” MGI said.

Before undertaking the merger, MGI inked definitive agreements last year to secure the remaining 30% equity interest of minority shareholders in TBGI, allowing the listed company to fully consolidate operations of the Teriyaki Boy and Sizzlin’ Steak restaurant systems under MGI.

TBGI owns and operates Teriyaki Boy and Sizzlin’ Steak.

Max’s Group has been reorganizing the company since taking over Pancake House, Inc. in 2014. Since then, the company has shut down underperforming stores and folded franchising units in North America and Middle East into the company.

MGI operates 673 outlets across the country, North America, the Middle East, and Asia under different brands namely Max’s Restaurant, Pancake House, Yellow Cab Pizza, Krispy Kreme, Jamba Juice, Max’s Corner Bakery, Teriyaki Boy, Dencio’s, among others.

MGI’s net profit fell by nearly a third to P123.7 million in the first quarter of 2018 from P176.0 million in the same period a year ago on the back of escalating raw material prices and larger manpower costs due to new labor policies.

Systemwide sales, on the other hand, increased 13% to P4.4 billion in January to March from P3.9 billion last year.

The company is pivoting to franchising as the preferred mode of expansion, both at home and overseas, leveraging on brand equity, operational expertise, and scale to propel store network expansion and boost fee-based collections, which generally equate to better profit translation.

Shares in MGI added two centavos or 0.16% to close at P12.28 apiece on Thursday. —