Restaurant Brands’ independent directors recommend takeover offer

The independent directors of Restaurant Brands, which operates KFC, Pizza Hut, Taco Bell and Carl's Jr in New Zealand, have recommended a takeover offer. Photo / James Pocock

Restaurant Brands’ independent directors have recommended a takeover offer well below valuation, saying risks linked to retaining a stake in the fast-food company outweigh the offer price.

They recommended shareholders accept the $5.05-a-share offer from Finaccess Restauración, even though it is below the $5.24–$6.20 valuation by independent adviser Calibre Partners.

The offer was at a 70.6% premium to dual-listed Restaurant Brands New Zealand’s closing price on September 29.

It was at a 79.6% premium to the one-month volume-weighted average price prior to that date.

Mexican company Finaccess’ offer was to acquire all the shares in Restaurant Brands that it did not already own.

Restaurant Brands operates KFC, Pizza Hut, Taco Bell and Carl’s Jr in New Zealand, and KFC and Taco Bell in Australia.

At October 23, Finaccess had received acceptances totalling 86.96% of Restaurant Brands New Zealand’s shares.

The remaining shareholders had until November 25 to accept the offer, unless extended.

“This has been a very carefully considered recommendation,” Stephen Ward, chair of Restaurant Brands New Zealand’s committee of independent directors, said.

“While the offer does not capture the full value potential of Restaurant Brands, the independent directors have had to weigh that against the very real risks and uncertainties facing minority shareholders.”

That included the limited market for trading their shares if the company was to remain listed under majority ownership.

Ward added that the offer allowed shareholders to realise a strong premium and transfer business risk to Finaccess.

This was at a time when the company continued to face margin and demand pressures.

“On balance, we see it as a pragmatic outcome that provides shareholders with certainty and liquidity in a difficult market.”

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