- Kuwait’s Americana owns the franchise for popular fast-food chains such as TGI Friday’s, KFC (pictured above) and Pizza Hut in the Middle East and North Africa region.
Kuwait’s Americana is in demand. Several investors, both regional and international, are apparently interested in acquiring a stake in the company that owns the franchise for popular fast-food chains such as TGI Friday’s Inc, KFC and Pizza Hut in the Middle East and North Africa.
On Tuesday, Saudi Arabian food maker Savola Group said it held preliminary talks with one of the largest shareholders in Americana to acquire their stock in the Kharafi family-controlled company that is listed on the Kuwaiti bourse.
And earlier this month The Wall Street Journal reported that KKR & Co. and CVC Capital Partners were working on a joint bid for Americana.
Savola explained its interest in Americana by noting that a potential deal would give it a bigger chance to grow in its two main sectors: food and retail.
Riyadh-based Al Rajhi Capital agrees with Savola. Besides being one of the largest operators of restaurant chains in the MENA region, Americana is also in the food manufacturing and processing sector.
“Americana’s distribution network will complement Savola’s own distribution network. Further, Americana could also provide some integration benefits to Savola considering their operations,” said Jithesh Gopi, the head of research at Al Rajhi Capital.
The acquisition however may not come cheap for Savola, Mr. Gopi reckons, given there are rumored offers from a number of private equity firms as well. “However, with access to low cost financing and the benefit of business synergies, we believe Savola may emerge as a front runner for acquiring the company.”
And a steeper valuation could still be justified. Afterall, Americana is a net cash-positive company, generating strong cash flows and a healthy return on equity, analysts say. Not surprisingly, Americana shares are up more than 16% since early July.
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(via WSJ Blogs)