Aussies Hungry For Fast Food

Stuff:

Restaurant Brands’ plunging share price has put New Zealand’s only listed fast food operator firmly back on the takeover agendas of hungry Australian private equity players, say analysts.

“It’s only speculation at this stage, but I’d be willing to bet money on it,” said one.

Last week’s near 30% fall in share price - Restaurant Brands shares are at an eight-year low of 95c - gives the firm a market capitalisation of $92 million. Private equity player CVC Asia Pacific offered it $160m ($1.65 a share) last year and an offer at $1.20 a share might now be enough to secure the company.

The CVC offer failed because CVC could not agree with US franchiser Yum, which owns the franchise on KFC and Pizza Hut.

But last week’s profit warning from Restaurant Brands, and doubts it would be able to maintain its dividend, could see renewed interest from CVC Pacific.

Macquarie Equities investment director Arthur Lim said Restaurant Brands was “seriously on the back foot”.

Last month, Restaurant Brands renewed half its KFC store franchises with Yum and the other 50% are due for renewal in May next year, when Pizza Hut franchises also expire.