Yum China Rejected a Very Generous Buyout Deal

Yum China Holdings Inc. jumped as much as 12 percent after the Wall Street Journal reported that the operator of Pizza Hut and KFC restaurants rejected a buyout offer from an investor group led by Hillhouse Capital Group.

The proposal to take over Yum China for $46 a share in cash would represent a 28 percent premium over the company’s shares as of Monday’s close. They jumped as high as $40.19 on Tuesday in New York trading after briefly being halted following the report, which cited an unidentified person familiar with the matter.

Bloomberg reported earlier this month, citing people with knowledge of the matter, that Hillhouse, Baring Private Equity Asia, KKR and DCP Capital had formed a consortium with sovereign fund China Investment Corp. to back a potential takeover of the company.

China’s biggest fast-food operator has been struggling to attract younger Chinese diners to restaurants in the face of increasing local competition and changing eating habits that favor healthier fare. Yum China was spun off from Louisville, Kentucky-based Yum! Brands Inc. in 2016.

Yum China couldn’t immediately be reached for comment outside normal business hours.

With assistance from Jonathan Roeder.

©2018 Bloomberg L.P.

This article was written by Crayton Harrison from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

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