The majority shareholder of Restaurant Brands New Zealand, Finaccess, has officially made its offer to take full ownership of the business, in what it says will provide shareholders certainty after several years of declining returns.
Finaccess, which owns 75.02% of the business, originally announced its intention to take over the business on September 30.
However, after receiving consent from the Overseas Investment Office on October 2, its offer is now official and unconditional.
The offer, valued at $5.05 per share, represents a 70.6% premium to the closing price on the NZX on the last trading day prior to the notice of intention at $2.96.
Restaurant Brands’ (RBD) share price has since risen sharply to trade around $5.035.
Finaccess Capital chief executive José Parés Gutiérrez, who is also chairman of Restaurant Brands NZ, said that since 2018 it had supported substantial reinvestment to expand and evolve the business.
“During this period all shareholders have experienced a sustained decline in the value of their investment, which we believe is being compounded by RBD’s low trading liquidity, small (approximately 25%) free float, exit from the NZX50 index and limited institutional ownership,” Gutiérrez said.
“We have reached a point where making this offer now and a change to private ownership presents shareholders with a solution to this structural risk, and certainty in a very uncertain trading environment.”
Finaccess said Restaurant Brands’ daily average trading volume is approximately three times lower than its NZX peers and nine times lower than its ASX peers.
The shareholder believes the issue is exacerbated by the composition of Restaurant Brands’ shareholder register.
“There is a relatively small proportion of institutions on the shareholder register with the large majority of the shareholder register being approximately 4700 small retail shareholders. Finaccess believes that this further limits trading liquidity,” it said.
“In this context, Finaccess sees limited ability for the Restaurant Brands’ share price to rerate in the medium term. Given Restaurant Brands’ very low trading liquidity, shareholders who do not accept the offer may find it difficult to exit their position on-market in the future at, or near, the offer price.”
Finaccess’ offer is open for acceptance until 11.59pm on November 25, 2025, unless the offer period is extended by Finaccess.
Restaurant Brands NZ’s committee of independent directors said they will issue a Target Company Statement by October 29, which will include an independent adviser’s report prepared by Calibre Partners valuing the business.
The committee advised shareholders not to take any action in respect of the offer until they have received the target company statement and the independent directors recommendation.
As previously reported, the Accident Compensation Corporation (ACC), Restaurant Brands NZ’s second largest shareholder, has agreed to accept the offer in relation to its 4.73% shareholding in the business.
Finaccess completed took majority ownership in 2019 under its previous name Global Valar SL for $881m.
The investor was forced to scale its $9.45 a share offer, a 24% premium at the time, after acceptances exceeded its 75% upper limit.
Gutierrez said at the time that keeping minority shareholders meant the business would continue to have market discipline.
“When you learn how to walk you can be tempted to run but most likely you are going to fall down because you are trying to go too fast,” Gutierrez said.
“What we like about Restaurant Brands is they like to move, but in a solid, steady way and that’s exactly the same philosophy that we have.”
He said the reason Finaccess didn’t go for the whole company was because the firm liked its long-term investments to remain listed.
The company operates popular fast food chains KFC, Taco Bell, Carl’s Junior and Pizza Hut, and has operations that run in Australia and two US States, California and Hawaii.
In its latest financial result, group sales grew 2.3% to $703.2 million in the six months to June 30, while net profit after tax (npat) dipped 5.6% to $11.9m compared with the prior comparable period.
Group store earnings before interest, taxes, depreciation and amortisation (ebitda) as a percentage of sales, known as ebitda margin, fell to 12.9% from 13.8%.
Sales in the company’s largest and historically most successful market, New Zealand, were flat at $309.7m.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.